On September 1st, Lotte Group entered an emergency management mode, sparking concerns about the potential withdrawal of Lotte Healthcare, a subsidiary of Lotte Holdings. In response to these speculations, Lotte Healthcare announced plans to implement an efficiency plan aimed at enhancing its business viability.

Industry sources reported on August 30th that Lotte Healthcare is being considered for potential business withdrawal due to the impact of Lotte Group's emergency measures. Established in April 2022, Lotte Healthcare is wholly owned by Lotte Holdings, which invested $52.3 million at its inception. Despite strong backing from the group, the company's performance has been underwhelming, recording sales of $598,000 last year against operating losses of $17.1 million. Even with a capital infusion of $22.4 million from Lotte Holdings in November, profitability remained elusive.

Lotte Healthcare's endeavors include participating in the International Consumer Electronics Show (CES) last January, where it introduced its nutritional supplement dispenser, "Pilky." However, the company faced allegations of technology theft from South Korean healthcare startup AlgoCare. Although Lotte Healthcare denied these allegations, it settled with AlgoCare five months later and exited the related business. Subsequently, the company launched a personalized health management platform, "CAZZLE," in September of the same year.

In a press briefing last September, Woong-Jo Woo, then Head of Business Division and now CEO of Lotte Healthcare, announced plans to introduce a mental health counseling service in collaboration with Atommerce and a brain health service with iMediSync by November 2024. Woo emphasized the company's ambition to establish a comprehensive healthcare ecosystem.

Concerns have arisen that the rumors surrounding Lotte Healthcare's potential withdrawal could negatively impact its partners. However, industry insiders in digital healthcare believe the effect on partnerships will be minimal if collaborations are only at the Memorandum of Understanding (MOU) stage. A digital healthcare industry source, speaking on condition of anonymity, noted, "If Lotte Healthcare's involvement with startups is limited to MOU-level collaborations, rather than actual investment or joint product and service development, the impact on partner companies should be minimal. However, the reduction in the promotional and credibility benefits that partners could gain from collaborating with a large corporation might be a concern."

Industry experts largely attribute Lotte Healthcare's significant operating losses to its entry into the business-to-consumer (B2C) market without a solid business model, a challenge also faced by other healthcare companies.

A Lotte Healthcare representative clarified, "No official decision has been made regarding the business withdrawal. In line with the group's emergency management measures, we are internally developing an efficiency plan to enhance business viability."

Meanwhile, Lotte Healthcare became the majority shareholder of TheragenHealth last October by acquiring a 51% stake in a joint venture with Theragen Bio. The company confirmed that TheragenHealth's operations remain unaffected by the current emergency management situation.