[Distribution Hot People] "Overseas Business TF Launches... Leading K Convenience Store Exports"

Interview with Lim Hyung-geun, Head of Overseas Business at BGF Retail
Convenience Store CU to Open First Store in Malaysia in Early Next Year
Plans to Expand to 500 Stores Within 5 Years

[Asia Economy Reporter Minyoung Cha] 'From a company receiving franchise services to a company providing services'

This is the phrase attached to BGF Retail, the operator of the native convenience store CU. After parting ways with Japan's FamilyMart in 2012 and standing tall as an independent brand, CU convenience store will expand its territory to Malaysia next year. This is the achievement about two and a half years after successfully entering Mongolia in 2018.

On the 10th, we met Lim Hyung-geun, head of BGF Retail's Overseas Business Division (photo), at the headquarters building in Samseong-dong, Seoul. Among his 20 years of company experience, he spent 15 years in merchandise planning (MD), covering almost all sectors from fresh food to daily necessities. Currently, he leads the overseas business task force (TF) for the Malaysia expansion and is responsible for communication with the local partner company, 'MyNews Holdings.'

Lim said, "There were various complex reasons for separating from FamilyMart, but we also had overseas expansion in mind," adding, "Despite the COVID-19 situation, we place significance on vigorously executing our business goals." He is determined to break away from the notion that 'distribution companies = domestic market' and take the lead in exporting Korean-style convenience stores (CVS).

The Malaysia expansion began when MyNews Holdings, the second-largest convenience store company locally, first expressed interest in partnership through the Korea International Trade Association (KITA). Lim explained, "MyNews Holdings had completed market research on Korea 4 to 5 times since last year, before the COVID-19 outbreak, and had acquired prior knowledge," adding, "The affection and interest in the Korean Wave, such as Korean variety shows being broadcast on Malaysian TV within just 30 minutes, became the starting point for collaboration."

The overseas business TF includes initial personnel for food and beverage (F&B), operations, delivery infrastructure construction, local market research teams, and store development staff. Considering Malaysia's large Muslim population, obtaining the local essential certification, 'Halal certification,' is also required. Since Malaysia currently does not have a fast-track system with Korea for businesspeople, employees must comply with a two-week self-quarantine policy after arriving locally. Even booking plane tickets is not easy under these circumstances, but they plan to complete the first and second group departures within the year and prepare to open the first store by the first half of next year. They have also set a goal to increase 500 stores over the next five years.

Regarding Malaysia's convenience store industry, he evaluated it as being at the "early 2000s level of Korea." He emphasized, "While IT-based online-to-offline (O2O) services such as 'Grab,' an essential app for Southeast Asian travel, are well developed, traditional markets still account for 50% of the offline distribution market," adding, "MyNews Holdings is also known to be proactive in utilizing IT technology, such as securing 'Grab Food' from the beginning, so there are many areas where Korean delivery services can be integrated."

Pointing to the world map posted on the door of his office, Lim said, "There are no limits to BGF Retail's overseas expansion," and added, "Although we have only two locations so far, we plan to steadily knock on the doors of overseas markets so that our people can meet CU stores around the world."