[The market slows down and South Korean retail giants withdraw from the NFT industry]
Lotte Home Shopping, the e-commerce arm of retail giant Lotte, has announced that it will end operations of its NFT store platform, according to reports from local news outlets in South Korea.
Rakuten launched NFT services on its platform in May 2022. However, just two years later, the company announced on June 12 that it would be shutting down NFT store operations on July 2.
The platform is integrated into Lotte Home Shopping’s mobile app and was initially part of the company’s strategy to develop the Metaverse platform.
Rakuten’s NFT store is unique in its approach, using South Korean Won (KRW) as the transaction currency to make it easier for non-crypto users.
The company has launched a line of NFT products themed after its corporate character, Bellygom, and has expanded its NFT offerings in collaboration with virtual KOL Lucy and the 2022 hit horror movie The Witches 2 . There are also plans to enable secondary NFT sales on Opensea, the world’s largest NFT trading platform. However, the recent closure means Rakuten Home Shopping is exiting the NFT industry entirely.
All remaining NFT operations, including Bellygom NFTs, will be transferred to Daehong Communications, a crypto startup owned by Rakuten Group.
Hyundai Department Store is another major retailer exiting the NFT industry. The modern NFT wallet service, launched the same year as Rakuten’s platform, offers customers various incentives such as discounts and free gifts. These services are now being discontinued and the company has chosen to exit the market.
Additionally, Shinsegae Group, another major player in South Korea’s retail industry, has also significantly reduced its NFT offerings. An industry insider revealed that many retailers were once keen to get into the NFT business but are now scaling back their operations as the market momentum wanes. "Instead, they are focusing on strengthening the competitiveness of their core business industries," the industry insider added.
Meanwhile, the latest trend of retail giants exiting the NFT market comes on the heels of South Korea’s changing stance on NFTs. The country’s top financial regulator is seeking to classify certain NFTs as virtual assets. The move requires businesses that issue NFTs classified as virtual assets to report them to South Korean government agencies.
