South Korean Retailers Begin Scaling Back NFT Operations

UTC by Temitope Olatunji · 3 min read
South Korean Retailers Begin Scaling Back NFT Operations
Photo: Depositphotos

As the hype around NFTs fades and trading activity plummets, South Korean retailers are pragmatically reassessing their strategic priorities and allocating resources accordingly.

Top South Korean NFT retailers are shutting down their non-fungible token (NFT) platforms as the broader market cools down. Lotte Home Shopping has announced that it will shut down its NFT shop on July 2nd. Lotte Home, which is Lotte’s e-commerce arm, was launched in May 2022 as part of the company’s project to create a metaverse business.

Lotte’s NFT Shop differentiated itself from others when it used Korean won (KRW) as its transactional currency. This system was implemented to allow non-crypto users to access the platform. The company also released its own Bellygom NFT character and partnered with artists and brands like virtual influencer Lucy and the horror movie “The Witch: Part 2” to expand its NFT offerings.

Following the termination of its NFT shop service, Lotte Home Shopping will disengage itself from the NFT business as the remaining digital assets of the company, including Bellygom NFT, will be managed by Daehong Communications. According to a local news outlet, an official from Lotte Home stated:

“In order to streamline the NFT business, we will terminate the operation of our own NFT shop… Daehong Communications will operate the NFT business, including Veligom NFT, as the NFT project hub.”

Decline in NFT Trading Volume Prompts Strategic Shift

Lotte is not the only major South Korean retailer scaling back its NFT ambitions. Hyundai Department Store has also shut down its H.NFT electronic wallet service, which offers customers discounts and benefits. Meanwhile, Shinsegae, another South Korean retail store, has reduced the perks associated with its NFT-based loyalty program.

Large companies are terminating their NFT business due to declining NFT trading volume. According to data from Dune Analytics, the monthly NFT trading volume on leading marketplace OpenSea has plunged from a peak of $3.6 billion in February 2022 to just $41 million as of last month, a 99% drop. Aside from this, according to NonFungible.com’s market tracker, between January and December 2023, NFT’s sales volume dropped from 18,939 to 1,796.

Thus, with this decline in sales volume, industries are now refocusing their efforts on strengthening their core business areas rather than investing resources into NFT initiatives that have failed to gain traction. The exit of these prominent players represents a setback for the NFT market in South Korea, which had seen a flurry of activity from major brands just a year ago.

Cautious Optimism amid a Cooling NFT Market

As the hype around NFTs fades and trading activity plummets, South Korean retailers are pragmatically reassessing their strategic priorities and allocating resources accordingly. Despite the noise reduction and market value decline, some NFT holders are still optimistic about the future growth of digital assets.

According to research conducted by FastCompany, some NFT owners, like Jacob Jackson, a technology writer, remain hopeful in the bullish movement for NFTs. However, he agreed that not all his acquired digital assets had surged in price. He’s not in a hurry to offload any, as the market is still quiet, and as new buyers start entering the space, there is a chance for the older NFTs to start yielding profits.

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