Lotte Healthcare to shut down after financial struggles and market reevaluation

Lotte Healthcare, a subsidiary of Lotte Group established to lead the conglomerate’s personalized digital healthcare initiatives, will be dissolved after three years of operation. 

The decision was finalized during an extraordinary general meeting on Tuesday, with the liquidation process expected to conclude by the first half of 2025.

Founded in April 2022 with a 70 billion won ($47 million) investment from Lotte Group, the company launched its personalized health management platform, Cazzle, in September 2023. However, the platform failed to meet expectations, attracting just 200,000 users—far below the projected 1 million.

The company’s financial struggles worsened, with operating losses widening from 11.2 billion won in 2022 to 23 billion won in 2023. Last year’s revenue stood at 800 million won. Despite a 50 billion won capital injection from Lotte Group, the business struggled to gain traction.

After assessing market conditions, Lotte Group determined that the personalized digital healthcare sector lacked long-term growth potential. "Given the market landscape and limited growth potential in personalized digital healthcare, the decision was made to liquidate the subsidiary," a Lotte Group official said.

Although Lotte Healthcare will cease operations, Lotte Group plans to focus on other healthcare-related ventures.

These include senior living projects under Hotel Lotte's Vitality & Liberty (VL) brand, offering upscale residences for older adults. The first projects—VL LHOUR in Busan and VL LEWEST in Seoul—are scheduled to open in January and October 2025, respectively.

Lotte Group is also exploring food technology innovations, such as zero-calorie products, alternative proteins, sweeteners, and plant-based meats, in collaboration with domestic startups to strengthen its position in this sector.

In biopharma, Lotte Biologics will oversee the group’s contract manufacturing organization (CMO) business, focusing on high-tech pharmaceuticals. While some industry sources suggest that Lotte Biologics may now lead the group’s bio initiatives, a Lotte Group official clarified that other subsidiaries, including Hotel Lotte and food-tech-focused companies, will also continue to develop healthcare-related ventures.

“It would be incorrect to assume that the liquidation of Lotte Healthcare leaves only Lotte Biologics as the group’s healthcare representative," the official noted. "Instead, the group's various subsidiaries will continue to pursue diverse healthcare-related initiatives."

Lotte Healthcare plans to terminate all services by next Tuesday.