Lotte, one of South Korea's biggest conglomerates, is liquidating its digital healthcare business this year.

Late in December, the company decided in a shareholders' meeting to close Lotte Healthcare, which it opened in April 2022 with a 70 billion won ($45 million) investment. 

Alongside liquidating Lotte Healthcare, the conglomerate also decided to sell its joint venture, Theragen Health, which offers genomic analysis services and does AI-driven drug development. 

WHY IT MATTERS

Once considered a future growth driver of the group, Lotte Healthcare ran a personalised health service through the digital platform Cazzle, which launched in September 2023. That same year, the business eyed the mental health space by co-investing in a mobile mental health app and partnering with a local medical device company to apply AI in diagnosing neurodegenerative diseases among seniors, particularly Alzheimer's disease. 

Though the business made 800 million won (over $500,000) in 2023, it lost 23 billion won ($15 million), exceeding the 11 billion won ($7 million) operating loss in 2022. 

The closure of Lotte Healthcare is expected to be completed by June this year. The company already ended their service on the last day of 2024, according to a notice posted on its website. 

THE LARGER TREND

The conglomerate recently underwent a leadership reorganisation as it promoted the eldest son of chairman Shin Dong-bin, Shin Yoo-yeol, as Lotte's new VP. It came along with the group's emergency management announcement following poor financial performances of its key subsidiaries in retail distribution and chemicals. Lotte now is focusing on the elderly sector with the launch of new urban housing brands this year.