Multiple South Korean Retailers End Their NFT Operations

Various South Korean retailers, such as Lotte and Hyundai, are closing their NFT (Non-Fungible Token) operations successively, dealing a significant blow to the sector. According to Herald Kyungjae, Lotte Home Shopping, the e-commerce division of Lotte, is discontinuing its NFT trading platform. Lotte introduced the NFT Shop platform slightly over two years ago, in May 2022. The company declared on June 12th that it would cease its NFT shop services by July 2nd, 2024.

A Sound Strategy

The platform, accessible through the Lotte Home Shopping mobile app, was conceived as part of a mid- to long-term strategy for constructing a metaverse platform. Unlike typical NFT trading platforms, NFT Shop utilized fiat KRW as its transaction currency to enhance accessibility for non-crypto holders. To bolster the appeal even further, the company launched its line of NFTs featuring its corporate character, Bellygom.

Lotte Home Shopping collaborated with Daehong Communications, a crypto startup owned by the Lotte Group, for this venture. The NFTs were released on the Polygon (MATIC) blockchain network. Subsequently, Lotte Home Shopping expanded its NFT collaboration with Daehong. Additionally, Lotte Home Shopping incorporated NFT tie-ins with its virtual influencer Lucy. The company also planned to facilitate secondary NFT sales on Opensea, the largest NFT trading platform in the world.

NFTs Slowly Winding Down

The closure of NFT Shop signifies Lotte Home Shopping completely exiting the NFT sector. The company will transfer all remaining NFT business interests, including Bellygom NFT, to Daehong. This move follows Hyundai Department Store also recently deciding to leave the market. Shinsegae, another retail giant, has significantly reduced the scope of its NFT offerings.

Meanwhile, Hyundai introduced its NFT wallet services (H.NFT) in 2022, offering customers discounts and free gifts. An unnamed industry insider mentioned that retailers initially rushed into the NFT business. However, as the NFT market has slowed down, they are now closing their platforms one after another. Instead, they are concentrating on enhancing the competitiveness of their core business areas.