Lotte Mart, an affiliate of retail giant Lotte, said Wednesday it is opening a supermarket in Indonesia, a move that comes as local retailers step up their overseas expansion amid flagging consumption on their home turf.

The company is set to open a 1,300-square-meter supermarket Thursday on the ground floor of a hotel in Kemang, a residential area heavily populated by middle- and upper-class expatriates, Lotte Mart said in a press release.

The supermarket, which is smaller than the discount chains that Lotte Mart operates in the Southeast Asian country, will be mostly stocked with high-end groceries and imported food products, it said.

The Kemang store is the latest addition to Lotte Mart's Indonesian business. Since acquiring the Indonesian unit of the Dutch discount chain Makro in 2008, the company has opened 37 stores across the country.

"We will do our best to successfully launch the supermarket by using our six years of experience in the country," said Kim Young-gyun, head of Lotte Mart's Southeast Asia unit, adding that the company may consider opening more stores in other key Indonesian cities.

South Korean retailers, including Lotte Mart, have been seeking new growth engines to overcome sluggish domestic demand in their home country.

Sapping consumer sentiment and policies aimed at protecting mom-and-pop stores have eroded profits at major retailers and are blocking their domestic expansion.

The Indonesian retail sector, which has logged double-digit growth since 2002, has naturally emerged as a key destination for South Korean companies.

Lotte Group, the retailer's parent group, operates 29 fast food eateries, two cafes, one department store and one duty-free store in the Southeast Asian country in addition to the discount chain stores. (Yonhap)