"Second Overseas Market Entry After Mongolia" CU Opens First Store in Malaysia

First Case Partnering with Local Convenience Store Brand
Betting on 'Korean-Style Convenience Store' Instead of Localization Strategy
60% Korean Products... Selling Popular CU PB and Excellent SMEs' Products
"CU Opening News Spreads on SNS, Interest Rising"
"50 New Stores to Open Within a Year... Aiming for Long-Term No.1 in Malaysia Industry"

BGF Retail opened its first Malaysia CU store, 'CU Centerpoint Branch,' on the 1st. Korean products account for 60% of the total merchandise in the store. Various Korean street foods such as tteokbokki, dakgangjeong, and bingsu are also made into ready-to-eat meals and sold.

[Asia Economy Reporter Yuri Kim] BGF Retail announced on the 1st that it has opened 'CU Store No. 1' in Kuala Lumpur, Malaysia. This marks its second global market entry following Mongolia in 2018.

BGF Retail, which operates CU, signed a brand license agreement last October with MYCU Retail, a subsidiary of Malaysian company Mynews Holdings, and announced its entry into the Malaysian market, becoming the first domestic convenience store operator to do so.

This entry into Malaysia is the first attempt to introduce the brand and system of a Korean convenience store to an overseas company operating a local brand. CU emphasized, "It is a meaningful move as CU, representing Korea, has challenged the Malaysian market where Japanese convenience stores are dominant."

Mynews Holdings, BGF Retail's partner, has been operating the local convenience store brand 'Mynews.com' in Malaysia since 1996. It is currently the second-largest convenience store company locally with about 530 stores. The number one in the Malaysian convenience store industry is 7-Eleven with about 2,400 stores, followed by FamilyMart with about 200 stores in third place.

Starting with the opening of the first store this month, CU plans to actively expand new store openings. Existing Mynews.com stores are also preparing for a sequential transition to CU. CU predicted, "A showdown between CU and Japanese convenience stores will unfold in the Malaysian market."

On the 1st, a customer is taking a photo while choosing the CU PB product 'Delafe Iced Drink' at Malaysia's first CU store, 'CU Centerpoint Branch,' which opened its doors.

The first CU store in Malaysia, named 'CU Centrepoint Store,' is a large store of 165.29㎡ (50 pyeong) located in a shopping mall in a middle-class residential area of Kuala Lumpur. The opening ceremony was attended by Lim Hyung-geun, Head of Overseas Business at BGF Retail, Luke, CEO of Mynews Holdings, Ambassador Lee Chi-beom of Korea to Malaysia, and KOTRA Director Kwon Young-jin.

Korean products account for 60% of the store's offerings. In addition to CU's popular private brand (PB) products, the store is stocked with famous Korean products and excellent items from small and medium-sized enterprises. Various Korean street foods such as fish cakes, tteokbokki, fried chicken, and bingsu are also sold as ready-to-eat meals.

CU stated, "Unlike the usual strategy of prioritizing localization when entering overseas markets, CU has adopted a reverse-thinking strategy unique to Korean convenience stores, considering the established Japanese culture in Malaysia and the recent rapid rise of K-Culture." They added, "Our partner requested that the products, services, and interior be implemented to closely resemble the Korean convenience stores seen in K-dramas." They explained, "The local young generation in Malaysia holds a high affinity for Korea, with Korean travel ranking first on their bucket lists."

The first CU store has been popular locally even before its opening. News of CU's opening has spread through social media among the Korean community in Malaysia as well as the local 20-30 age group, attracting significant attention from Malaysian media. Malaysia's main convenience store consumer demographic, ages 20 to 39, accounts for 35% of the total population. With a per capita GDP of about $11,000, ranking third among Southeast Asian countries, the purchasing power is high. CU sees high growth potential in the convenience store industry due to the relatively low number of convenience stores per capita compared to other countries.

Starting with this Malaysian entry, CU is introducing the 'BGF Overseas Business Dedicated Global System' for the first time. They explained, "This is the industry's first integration of the Korean convenience store model, accumulated over decades of professional experience, with K-IT technology in overseas markets." CU added, "The application of the BGF global system specialized for convenience store operations enables fast and efficient integrated management in overseas businesses." Following Malaysia, CU plans to expand the BGF global system to its Mongolian operations and apply this standardized system to future overseas ventures.

BGF Retail President Lee Geon-jun said, "Through Korea's differentiated convenience store model and operating system, we will win against global brands and establish ourselves as a leading export industry." He added, "CU's successful entry into the Malaysian market will serve as a foothold for domestic companies to enter the 2 billion halal market."

Meanwhile, BGF Retail and Mynews Holdings aim to open 50 new stores within a year. They aspire to increase the number of stores by more than 500 over the next five years and become the number one convenience store company in Malaysia in the mid to long term.