Several South Korean retail behemoths have opted to clear the non-fungible token (NFT) market in a clear change in their digital strategies blaming a decline in market conditions.
Among the retailers quitting the NFT market are two of the largest ones in South Korea, Lotte and Hyundai. Lotte Home Shopping, the e-commerce branch of Lotte Group, revealed its plan to close its NFT store platform by July 2 just two years after it first opened in May 2022.
Originally considered Lotte’s entry into the metaverse, the platform was special in allowing transactions in fiat Korean Won (KRW), aiming to attract non-crypto users. It comprised NFTs of business character Bellygm, links to prestigious novels like “As the Witch: Part 2. The Other One,” and ties to virtual influencer Lucy.
South Korean Retail Giants’ Withdrawal Impact on NFT Market
Opensea has secondary sales scheduled, but Lotte’s closing signifies a total break from the NFT scene. Among all the remaining NFT assets, bellygm NFTs will be moved to Daehong Communications, a crypto company based under Lotte Group.
The Hyundai Department Store is another well-known partner that provides discounts and free presents. By 2022, the company will introduce NFT wallet services. Hyundai, however, is cutting these discounts as it leaves the NFT sector, following Lotte’s lead.
Another heavyweight on South Korea’s retail landscape, Shinsegae, has also drastically cut NFT sales. According to an industry insider, weakening market momentum is forcing many stores that entered the NFT market with great enthusiasm to back off today.
Retail behemoths departing the NFT arena follow shifting South Korean regulatory dynamics. The country’s financial authorities are discussing designating some NFTs as virtual assets, which would expose them to government agency reporting requirements.
While they reject NFTs, these retail behemoths are stressing more and more the requirement of improving their main business talents.
This strategic research highlights the challenges early adopters in the NFT field experience resulting from changing legal regimes and different market conditions.
