Core Viewpoint - The article discusses the impact of geopolitical events on business operations, specifically focusing on the case of Lotte Group in China, highlighting how external political factors can severely affect a company's market presence and performance [1][3]. Group 1: Lotte Group's Market Entry and Initial Success - Lotte Group, one of South Korea's major conglomerates, entered the Chinese market in 1994 and initially achieved significant success in the retail sector due to its brand recognition and diversified business operations [1][3]. - The company invested heavily in China, reflecting South Korea's confidence in the Chinese market, and expanded into various sectors beyond retail [1][3]. Group 2: The Impact of the THAAD Deployment - The deployment of the THAAD missile defense system in South Korea in February 2017 led to a strong backlash from Chinese consumers, who perceived it as a threat to national security, resulting in a boycott of South Korean products [2][3]. - Lotte Group became a target of this backlash due to its close ties with the South Korean government, leading to a dramatic decline in its supermarket sales in China [2][3]. Group 3: Consequences of the Boycott - Following the THAAD incident, Lotte's business in China suffered significantly, with a sharp drop in consumer traffic and sales, despite the company's attempts to increase investment to reverse the trend [2][3]. - By the end of 2018, Lotte's global ranking plummeted from the top 100 to 304, indicating severe losses attributed to its declining presence in the Chinese market [2][3]. - By 2019, Lotte had only three stores remaining in China, and its attempts to revive its operations, such as the reopening of Lotte World in Shenyang, failed to restore its previous success [2][3]. Group 4: Shift in Business Strategy - In response to the losses in China, Lotte Group has shifted its focus towards Southeast Asia, exploring new business opportunities such as duty-free retail to regain its footing [2][3]. - Despite these efforts, the company acknowledges that its current performance in Southeast Asia does not match the previous success it experienced in China [2][3].