Lotte C&F logo. (Lotte C&F)

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South Korea’s Lotte is making its foray into Vietnam’s consumer finance market by introducing a Buy Now, Pay Later (BNPL) service, which allows customers to purchase products and pay later without requiring a credit score.

Under this system, the BNPL provider covers the upfront cost for the merchant, and customers reimburse the BNPL provider over time. This payment model, which typically incurs no or low fees compared to credit cards, has gained traction as an alternative in countries with low credit card penetration.

Vietnam is a nation whre around 70 percent of its population under the age of 35, has a credit card penetration rate of under five percent. However, the adoption of electronic payment systems is accelerating, driven by the younger generation’s comfort with digital platforms and preference for convenience.

Recognizing the potential of Vietnam’s BNPL market, Lotte plans to integrate BNPL across its various businesses in the country. Lotte’s joint venture, Lotte C&F, launched BNPL services at Lotte Cinema locations in Vietnam in March 2024, followed by Lotte Mart in August. Consumers can currently use Lotte C&F’s BNPL service for online shopping at Lotte Mart and online bookings with Lotte Cinema.

Looking ahead, Lotte C&F aims to extend the service to more than 300 Lotte-operated locations, including 16 Lotte Mart stores, 45 Lotte Cinema venues, and a variety of affiliated sites such as department stores, hotels, fast-food outlets, and aquariums. Lotte also plans to partner with global brands and e-commerce firms to broaden BNPL adoption. “By analyzing purchase patterns, we aim to provide customers with diverse benefits, making BNPL a new source of vitality for our local distribution business,” a Lotte spokesperson said.

This expansion into Vietnam’s consumer finance sector is expected to strengthen Lotte’s global competitiveness in retail. Lotte Shopping, part of the group’s distribution division, recently announced its goal to generate 3 trillion won ($2.18 billion) in overseas revenue by 2030. The initiative aligns with Lotte Group Chairman Shin Dong-bin’s directive at a recent management meeting, where he urged the exploration of business opportunities in high-growth countries.