Lotte Vietnam cannot offset loss despite huge increase of sale

By Tran Anh - Aug 30, 2018 | 08:19 AM GMT+7

TheLEADERStrong growth of sales over the past years helped Lotte Vietnam boost its profit but it still cannot offset its accumulated losses.

In Vietnam, Lotte Group has investment in many fields, including Lotte Vietnam that specializes in producing chewing gum for nearly 100 million people - market.

The latest three-year business results show that Lotte Vietnam's sales increased strongly. In 2015, its revenue was nearly $25 million, and the figure was $27 million in 2016 and $32 million in 2017.

It is notable that increasing revenue in the context of low cost helped Lotte Vietnam's gross income soar to 48 per cent in 2017, reach $15 million.

However, like many other FDI firms, Lotte Vietnam reported losses in its early years of establishment for a reason of new investment and until now, it still has an accumulated loss of $3.2 million.

After building its factory in Binh Duong province in 1998, Lotte Vietnam focused on producing and promoting the chewing gum brand Lotte Xylitol from 2006. At that time, xylitol gum that is sugar-free but contains natural sweetener advertised to be good for teeth was a trend in Japan and other Asian countries including Vietnam.

Vietnam market after the entering of Lotte was flooded with the xylitol gum of which the most outstanding were Wrigley Vietnam's Extra Xylitol and Lotte's Lotte Xylitol.

Wrigley Vietnam is the leading player in gum market, accounting for 58 per cent of share with well-known brands such as Doublemint, Cool Air and Juicy Fruit. However, in xylitol segment, Lotte Xylitol is dominant when it has a wide distribution channel from grocery stores, supermarkets, convenience stores to pharmacies.

After the success of Xylitol gum, Lotte Vietnam has developed its branches in four cities in Vietnam namely Hanoi, Hai Phong, Da Nang and Can Tho and also expanded its portfolio with new products such as Fusen No Mi, Bub-up and Doraemon.

The development of modern retail channels such as hypermarket, supermarket and convenience stores helps chewing gum products be distributed more easily.

In addition, looking at developed countries where people have to work continuously, chewing gum is seen as an effective way to relax, which shows that Lotte Xylitol will grow more in the future.