China’s online boycott puts Lotte in cross hairs amid THAAD row

China’s e-commerce platforms are spearheading an anti-Lotte campaign amid Sino-Korean tensions over US-backed THAAD system

PUBLISHED : Monday, 06 March, 2017, 8:00am
UPDATED : Monday, 06 March, 2017, 9:20am

Lotte, the Japanese-Korean conglomerate with businesses from confectionery to malls, has found itself in the cross hairs of China’s nationalist mobs last week as online shoppers and internet trolls launched a boycott of the brand for allowing a US missile defence system to be placed on a plot of Lotte land in South Korea.

Responding to the coordinated boycott, some brick-and-mortar retailers and online shopping platforms have removed everything under the Lotte brand – from cosmetics to candies – from their physical and digital shelves.

“We have completely scrubbed the name of Lotte from our website,” Chen Ou, founder and chief executive of China’s biggest cosmetics group-purchasing platform Jumei Youpin, said in a blog post on Sina Weibo last week. “We‘d rather die than carry its goods in future.”

Lotte operates five department stores and as many as 100 supermarkets in a dozen Chinese provinces since it extended its footprint into the country in 1994.

An estimated 29 per cent of Lotte’s global sales come from China, and Chinese tourists contributed 70 per cent of sales at the group’s duty-free shops in Korea last year.

It was not always that way. Helped by the immense popularity of Korean soap operas, pop stars and K-pop dancers, Korean brands and lifestyle products had also been among the most sought-after consumer goods in China.

Samsung’s smartphones, Sulwhasoo’s cosmetics and Tous Les Jours’ bakeries are among some of the brands that have captured China by storm in the past five years, riding on the wave of the country’s economic growth and the popularity of K-pop.

That has taken a drastic turn amid the campaign led by Chinese state media blaming Lotte for acceding to a Korean government requisition for land to deploy the US Terminal High Altitude Area Defence (THAAD) missile shield.

Although aimed at protecting South Korea from potential missile strikes by the North – the two Koreas are still technically at war – THAAD’s radars can detect aircraft movements inside China, exposing Chinese military secrets to South Korea’s American ally.

South Korea, US forces begin joint military drills amid THAAD missile tensions with Beijing, the second-largest e-commerce platform backed by Tencent Holdings and Wal-Mart Stores, last week closed its Lotte online site selling South Korea-made confectionery, without giving a reason.

Tmall, run by Alibaba Group Holding, closed its Lotte online outlet in January, without giving a reason. Lotte brand goods can still be found on Taobao, the online site operated by Alibaba, the owner of the South China Morning Post.

The anti-Lotte campaign now comes with a blacklist of Lotte’s subsidiaries in China, spanning beverages, chemical companies, cafes, cinemas and logistics operators.

The tension has also spread to other Korean businesses.

Orion, a Seoul-based food producer with two-thirds of the Chinese market for chocolate pies, was under attack on Sina Weibo even after a clarification that it was not a Lotte business.

Seoul wants THAAD, but do Koreans?

An Orion blog post distancing the company from Lotte was met by this response from a Weibo user called zZYinxin: “Never mind. As long as you are Korean.”

Internet campaigns are not unique to Chinese trolls. A boycott called #GrabYourWallet is in full force in the US, pushing Macy’s and Nordstrom stores to stop carrying the Ivanka Trump line of clothing and accessories in protest against her father Donald Trump’s policies.

In a country where the scars and memories of China’s Cultural Revolution’s mob violence are barely 40 years old, the journey from political violence to online protest is a thumb’s swipe on a smartphone or a blog post away.

Many foreign businesses had found themselves on the short end of the Chinese fuse. French retailer Carrefour was boycotted in 2008, when a Chinese Olympic torch bearer going through Paris was met by human rights activists protesting China’s rights abuses.

In 2012, Japanese businesses caught China’s ire amid rival sovereignty claims over the Diaoyu islands, also known as the Senkakus, between China and Japan.

Japanese restaurants and vehicles made by Nissan Motor, Toyota Motor Corp and Honda Motor were vandalised by mobs in a rampage that spread to many Chinese cities, leaving millions of yuan in damaged property and at least one Chinese consumer severely injured.

Now, the rampage is spreading online as China’s explosive growth in e-commerce dominates the everyday life of Chinese consumers.