Several South Korean retail giants, including Lotte and Hyundai, are exiting the non-fungible token (NFT) sector, marking a significant shift in their digital strategy.
The companies’ move follows a notable slowdown in the NFT market, prompting them to refocus their plans on their core businesses.
According to a local South Korean news outlet, Lotte Home Shopping, the e-commerce arm of retail giant Lotte, has announced that it will end operations for its NFT shopping platform.
Lotte launched its NFT services through the platform in May 2022. However, after just two years, the company announced on June 12 that it would close its 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 Shop differentiated itself in its approach by using fiat KRW as the transaction currency to ease access for non-crypto users.
The company had expanded its NFT offering by launching lines with its corporate character Bellygom and collaborating on projects with its virtual influencer Lucy and the hit 2022 horror film “The Witch: Part 2. The Other One.”
Plans were also in the works to enable secondary NFT sales on Opensea, the world’s largest NFT trading platform.
However, the recent closure means that Lotte Home Shopping is withdrawing from the NFT sector completely.
All remaining NFT business interests, including the Bellygom NFT, will be transferred to Daehong Communications, a crypto startup owned by the Lotte Group.
We are proud to announce the collaboration between Lotte and Pudgy Penguins (@pudgypenguins).
Pudgy Penguins, the most relevant Web3 IP out there, extends its value to WEB2 as well.
Keep following us for our special collaboration with Bellyland (@bellygom_nft)🐧🐻. pic.twitter.com/WNpYgzitvW
— daehong_official (@Daehongofficial) May 16, 2024
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Hyundai Department Store is another major retailer taking a step back from the NFT space. Launched in the same year as Lotte’s platform, Hyundai’s NFT wallet services offered customers various incentives such as discounts and free gifts. These services are now being discontinued as the company chooses to exit the market.
Additionally, Shinsegae, another major player in South Korean retail, has significantly reduced its NFT offerings. An industry insider revealed that many retailers had eagerly entered the NFT business but are now scaling back their operations as the market’s momentum wanes.
“Instead, they are focusing on strengthening the competitiveness of their core businesses,” the insider added.
Meanwhile, the latest trend of retail giants exiting the NFT markets follows closely on the heels of South Korea’s changing attitude towards NFTs.
Notably, the country’s top financial regulator is seeking to classify certain NFTs as virtual assets.
The measure requires companies issuing NFTs classified as virtual assets to report them to the South Korean government agency.
Read more: South Korean bank employees embezzle $7.5 million to invest in crypto