Multiple major retail companies in South Korea, such as Lotte and Hyundai, are making the decision to leave the non-fungible token (NFT) sector, signaling a significant change in their digital strategies.
This shift comes as the NFT market experiences a noticeable slowdown, prompting these companies to redirect their focus towards their core business strengths.
Lotte Home Shopping, the e-commerce division of retail giant Lotte, recently announced the discontinuation of its NFT shop platform. The platform was initially launched in May 2022, but after just two years of operation, the company revealed its plans to shut down the NFT shop operations on July 2.
The NFT shop was integrated into the Lotte Home Shopping mobile app as part of the company’s strategy to develop a metaverse platform. Unique to Lotte’s approach was the use of fiat KRW as the transaction currency, making it more accessible to non-crypto users.
The company had expanded its NFT offerings to include collections featuring corporate character Bellygom, collaborations with virtual influencer Lucy, and tie-ins with the popular 2022 horror movie “The Witch: Part 2. The Other One.” There were also plans to enable secondary NFT sales on Opensea, the world’s largest NFT trading platform. However, the recent closure indicates Lotte Home Shopping’s complete exit from the NFT sector.
Remaining NFT business interests, including the Bellygom NFT, will now be transferred to Daehong Communications, a crypto startup owned by the Lotte Group.
In a similar move, Hyundai Department Store, which launched its NFT wallet services in the same year as Lotte, is also withdrawing from the NFT space. The company’s NFT wallet services offered customers various incentives like discounts and free gifts, but these services are now being discontinued as Hyundai exits the market.
Meanwhile, Shinsegae, another significant player in the South Korean retail industry, has also scaled back its NFT offerings. An industry insider revealed that many retailers had eagerly entered the NFT business but are now reducing their operations due to the market’s slowing momentum.
According to the insider, these companies are shifting their focus towards strengthening their core business areas rather than pursuing NFT ventures.
This trend of retail giants exiting the NFT markets aligns with South Korea’s evolving stance on NFTs. The country’s top financial regulator is looking to classify certain NFTs as virtual assets, requiring businesses issuing such NFTs to report them to the South Korean government body.
In a separate incident, a South Korean bank employee embezzled $7.5 million to invest in cryptocurrencies.