South Korean retail giants withdraw from NFT sector amid market slowdown

The NFT Unicorn 8a99aaee6a73a148e40f66410130199aca4270ab.webp South Korean retail giants withdraw from NFT sector amid market slowdown NFT News

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 business competencies.

According to a local South Korean news outlet, Lotte Home Shopping, the e-commerce arm of retail giant Lotte, announced it would end operations for its NFT shop platform.

Lotte launched its NFT services over the platform in May 2022. However, after just two years, the firm revealed on June 12 that it would shutter the NFT shop 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 was distinct in its approach by using fiat KRW as the transaction currency to facilitate access for non-crypto users.

The company had expanded its NFT offerings by launching lines featuring its corporate character Bellygom and collaborating on projects with its virtual influencer Lucy and the hit 2022 horror movie “The Witch: Part 2. The Other One.”

Plans were also underway to enable secondary NFT sales on Opensea, the world’s largest NFT trading platform.

However, the recent closure signifies Lotte Home Shopping’s complete withdrawal from the NFT sector.

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 partnership between Lotte and Pudgy Penguins (@pudgypenguins).

Pudgy Penguins, the most relevant Web3 IP out there is expanding their value into WEB2 too.

Stay tuned for our special collaboration with Bellyland (@bellygom_nft)🐧🐻.

— daehong_official (@Daehongofficial) May 16, 2024

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Hyundai Department Store is another major retailer that is stepping 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 opts to exit the market.

Additionally, Shinsegae, another key player in the South Korean retail sector, has significantly reduced its NFT offerings. An industry insider revealed that many retailers had eagerly entered the NFT business but are now scaling down their operations as the market’s momentum wanes.

“Instead, they are focusing on strengthening the competitiveness of their core business areas,” the insider added.

Meanwhile, the latest trend of retail giants exiting NFT markets follows on the heels of South Korea’s shifting stance regarding NFTs.

Notably, the country’s top financial regulator is seeking to classify certain NFTs as virtual assets.

The move mandates that businesses issuing NFTs classified as virtual assets report them to the South Korean government body.

Read more: South Korean bank staff embezzles $7.5m to invest in crypto

Source: Crypto News