South Korean retail giants withdraw from NFT sector due to market slowdown

Several South Korean retail giants, including Lotte and Hyundai, are abandoning the non-fungible token (NFT), marking a significant change in their digital strategy.

The companies’ decision follows a slowdown of the NFT marketencouraging them to refocus their projects on their core business skills.

According to to a local South Korean media outlet, Lotte Home Shopping, the e-commerce arm of retail giant Lotte, announced that it will end operations of its NFT store platform.

Lotte launched its NFT services on the platform in May 2022. However, after just two years, the company revealed on June 12 that it would shut down NFT store operations on July 2.

The platform, integrated into the Lotte Home Shopping mobile app, was initially part of the company’s strategy to develop a metaverse platform.

Lotte’s NFT store was notable for its approach using fiat KRW as a transaction currency to facilitate access for non-crypto users.

The company had expanded its NFT offerings by launching lines featuring its corporate character Bellygom and collaborating on projects with its virtual influencer Lucy and the 2022 blockbuster horror film “The Witch: Part 2. The Other One” .

Plans were also underway to enable secondary sales of NFTs on Opensea, the world’s largest NFT trading platform.

However, the recent closure signifies the complete withdrawal of Lotte Home Shopping from the NFT sector.

All remaining NFT business interests, including Bellygom NFT, will be transferred to Daehong Communications, a crypto startup owned by the Lotte Group.

Hyundai Department Store is another major retailer pulling out of the NFT space. Launched the same year as the Lotte platform, Hyundai’s NFT wallet services offered customers various incentives such as discounts and free gifts. These services are now discontinued as the company chooses to exit the market.

Additionally, Shinsegae, another key player in the South Korean retail sector, has significantly reduced its NFT offerings. An industry insider revealed that many retailers had enthusiastically jumped into the NFT business, but are now scaling back operations as market momentum fades.

“Instead, they are focusing on strengthening the competitiveness of their core business areas,” the source added.

Meanwhile, the latest trend of retail giants exiting NFT markets follows South Korea’s shift in stance regarding NFTs.

It should be noted that the country’s main financial regulator is looking to classify certain NFTs as virtual assets.

The move requires companies issuing NFTs classified as virtual assets to report them to the South Korean government body.

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