Lotte Shopping, a division of the South Korean food conglomerate, has won regulatory approval to open up to 20 discount stores in Vietnam, Asia's up-and-coming retail market.

The company, a newcomer to the international retail scene, has begun to look abroad for growth opportunities as it faces increasing competition at home and slowing domestic demand.

It recently announced plans to open department stores in Moscow and Beijing but Vietnam will be Lotte's first overseas market for its discount stores. The first outlet will open in early 2008 in Ho Chi Minh City.

Unlike China, where foreign retailers have rushed to do business in recent years, the Vietnamese market is relatively undeveloped with only Germany's Metro and Thailand's The Big C already offering discounted goods.

"The big retailers like Tesco and Wal-Mart have not yet entered so competition is relatively low," a company official said.

Vietnam's recent accession to the WTO is however likely to change this.