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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 comes after a notable slowdown in the nft market, prompting them to refocus their plans on their core business competencies.
According According to a local South Korean media outlet, Lotte Home Shopping, the e-commerce arm of retail giant Lotte, announced that it would end operations of its nft store platform.
Lotte launched its nft services through the platform in May 2022. However, after just two years, the company revealed on June 12 that it would close 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 distinguished itself with its approach of using fiat KRW as a transaction currency to facilitate access for non-crypto users.
The company had expanded its nft offering by launching lines with its corporate persona Bellygom and collaborating on projects with its virtual influencer Lucy and the 2022 hit horror film “The Witch: Part 2. The Other One.”
There were also plans afoot to allow secondary sales of nfts on Opensea, the world's largest nft trading platform.
However, the recent closure means Lotte Home Shopping's complete withdrawal from the nft sector.
All remaining nft business interests, including Bellygom nft, will be transferred to Daehong Communications, a crypto startup owned by Lotte Group.
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Hyundai Department Store is another major retailer moving away from the nft space. Launched the same year as Lotte's platform, Hyundai's nft wallet services offered customers various incentives such as discounts and freebies. These services are now being discontinued as the company chooses to exit the market.
Additionally, Shinsegae, another key player in South Korea's retail sector, has significantly reduced its nft offering. An industry expert revealed that many retailers had enthusiastically entered the nft business, but are now scaling back their operations as market momentum wanes.
“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 changing stance on nfts.
Notably, the country's top financial regulator is seeking to classify certain nfts as virtual assets.
The measure requires companies that issue nfts classified as virtual assets to report them to the South Korean government body.
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