You will be redirected back to your article in seconds

Lotte Edges Closer to Indonesia Cinema Expansion

South Korean movie giant Lotte is advancing its plans to expand into Indonesia. The country is one of the least-developed major markets in Asia.

Lotte executives recently met with government ministers in Indonesia; the company is now hatching a feasibility study.

“We don’t have an exact timeline for physically launching a new cinema business in Indonesia yet, but it is highly likely that the country will be our third territory overseas, following Vietnam and China,” a Lotte Group source told Variety.

The move is made more likely by a conjuncture of internal and external forces, and a tricky combination of push and pull factors.

Hastening the outreach, the giant and diversified Lotte conglomerate is currently seeking to spin off its Lotte Cinema and Lotte Entertainment business from the parent company. That is expected to put an increased premium on growth of the movie businesses.

Lotte Cinema is currently the second-largest exhibition chain in Korea, operating 112 complexes in the country and accounting for a 30% share of ticket revenue. Further expansion within Korea is problematic as the market is close to saturation and Lotte and its chief rival, CJ-CGV, are currently being probed for alleged oligopoly practices.

Lotte Cinema has expanded into Vietnam and China — it operates 42 theaters in the Middle Kingdom — but, with South Korea and China currently at loggerheads over Korea’s missile shield deployment, a retreat seems more likely than growth. Lotte Group last month confirmed plans to dispose of its 112-store supermarket chain in China. Indonesia looks like more fertile ground.

Lotte already has a chemicals business, department stores and convenience stores in Indonesia, with the country accounting for some 15% of group revenues. Now it is expanding on other fronts. This week it unveiled a $100 million e-commerce joint venture, iLotte, with Salim Group. That will target women shoppers by selling clothes, Korean cosmetics and other lifestyle goods.

As a cinema market, Indonesia appears to offer huge upside. After decades of a stultifying near-monopoly in exhibition and the releasing of Hollywood movies, the theatrical market is now being prised open by two newcomers, Korea’s CJ-CGV, which took over the private equity-financed Blitz chain, and Cinemax, which is backed by powerful Indonesian conglomerate Lippo.

For all its 260 million people, Indonesia currently counts less than 1,300 cinema screens. New investments are now helping to expand the screen count, and ticket sales are rising quickly. One well-placed Indonesian source recently told Variety that the national box office now exceeds $200 million per year.

The Indonesian government has recently done a U-turn on foreign investment in the movie business. After being on a so-called negative list for decades, Indonesia’s film production and exhibition sectors can now accept foreign investment, without caps on ownership. The biggest direct foreign investment in the sector since the opening up was last December’s injection of $260 million by Singapore sovereign wealth fund GIC into incumbent exhibitor Cinema XXI.

Lotte is increasingly being recognized for its innovation in cinema. It operates the world’s largest conventional movie screen — 34 meters wide — at its Lotte World multiplex in Seoul. It recently installed pioneering LED screens in Seoul and Busan. Lotte Cinema CEO, Won Chun Cha, will receive a special achievement award at the CineAsia convention in December.

Triawan Munaf, liaison minister and head of Indonesian Creative Economy Agency, met with Shin Dong-bin, CEO of Lotte Group in July. “The minister is discussing various business potentials with Lotte,” Munaf’s spokesman confirmed.

More Film

  • Boo 2! A Madea Halloween

    Box Office: 'Boo 2! A Madea Halloween' to Haunt Competition on Slow Weekend

    South Korean movie giant Lotte is advancing its plans to expand into Indonesia. The country is one of the least-developed major markets in Asia. Lotte executives recently met with government ministers in Indonesia; the company is now hatching a feasibility study. “We don’t have an exact timeline for physically launching a new cinema business in […]

  • Creative hollywood new leaders variety 2017

    Hollywood’s New Creative Leaders of 2017

    South Korean movie giant Lotte is advancing its plans to expand into Indonesia. The country is one of the least-developed major markets in Asia. Lotte executives recently met with government ministers in Indonesia; the company is now hatching a feasibility study. “We don’t have an exact timeline for physically launching a new cinema business in […]

  • Agents and Managers hollywood new leaders

    Hollywood New Leaders: Agents and Managers

    South Korean movie giant Lotte is advancing its plans to expand into Indonesia. The country is one of the least-developed major markets in Asia. Lotte executives recently met with government ministers in Indonesia; the company is now hatching a feasibility study. “We don’t have an exact timeline for physically launching a new cinema business in […]

  • Sexual-Harassment-In Journalism Hollywood

    A TV Executive Sexually Assaulted Me: A Critic's Personal Story

    South Korean movie giant Lotte is advancing its plans to expand into Indonesia. The country is one of the least-developed major markets in Asia. Lotte executives recently met with government ministers in Indonesia; the company is now hatching a feasibility study. “We don’t have an exact timeline for physically launching a new cinema business in […]

  • WONDER WOMAN

    Women Powered Summer Box Office Successes, New Data Shows

    South Korean movie giant Lotte is advancing its plans to expand into Indonesia. The country is one of the least-developed major markets in Asia. Lotte executives recently met with government ministers in Indonesia; the company is now hatching a feasibility study. “We don’t have an exact timeline for physically launching a new cinema business in […]

  • The Final Year TIFF

    Magnolia Nabs Worldwide Rights to Obama Documentary 'The Final Year' (EXCLUSIVE)

    South Korean movie giant Lotte is advancing its plans to expand into Indonesia. The country is one of the least-developed major markets in Asia. Lotte executives recently met with government ministers in Indonesia; the company is now hatching a feasibility study. “We don’t have an exact timeline for physically launching a new cinema business in […]

More From Our Brands

Access exclusive content