Major South Korean retailers exit NFT market due to slowing growth
Numerous major South Korean retail corporations, such as Lotte and Hyundai, are withdrawing from the non-fungible token (NFT) sector, indicating a significant shift in their digital strategies.
This decision by the companies comes in response to a noticeable slowdown in the NFT market, prompting them to redirect their focus towards their core business strengths. Lotte Home Shopping, the e-commerce division of retail giant Lotte, recently announced that it would be closing its NFT shop platform.
The NFT services were initially launched by Lotte in May 2022 but were discontinued after just two years, with operations set to cease on July 2. The platform, which was integrated into the Lotte Home Shopping mobile app, was part of the company’s efforts to develop a metaverse platform.
One unique aspect of Lotte’s NFT Shop was its 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 its corporate character Bellygom, collaborations with virtual influencer Lucy, and tie-ins with the 2022 horror film “The Witch: Part 2. The Other One.”
Plans were also in place to allow for secondary NFT sales on Opensea, the world’s largest NFT trading platform. However, the recent closure signifies Lotte Home Shopping’s complete departure from the NFT sector, with all remaining NFT interests, including the Bellygom NFT, being transferred to Daehong Communications, a crypto startup owned by the Lotte Group.
Hyundai Department Store, another prominent retailer, is also stepping back from the NFT space. Launched in the same year as Lotte’s platform, Hyundai’s NFT wallet services provided customers with various incentives such as discounts and free gifts, which are now being discontinued.
Similarly, Shinsegae, another major player in the South Korean retail industry, has significantly scaled back its NFT offerings. An industry insider disclosed that many retailers had eagerly entered the NFT market but are now reducing their operations as market momentum slows down.
The trend of retail giants exiting the NFT market aligns with South Korea’s evolving stance on NFTs. The country’s top financial regulator is moving to classify certain NFTs as virtual assets, requiring businesses issuing these NFTs to report them to the South Korean government.
In another development, a South Korean bank employee embezzled $7.5 million to invest in cryptocurrency, underscoring the growing interest and risks associated with digital assets.
