[Expanding Overseas K-Distribution] K-Food and PB Products Front and Center... Convenience Stores 'Exploding in Popularity'

CU, 213 Stores in Mongolia
GS25, Operating PB Yours Product Zone
Emart24, K-Food Accounts for 50% of Total Sales

Customers are purchasing products at CU in Malaysia.

[Asia Economy Reporter Lim Chun-han] The convenience store industry is accelerating its overseas expansion into countries such as Mongolia, Vietnam, and Malaysia. With the domestic convenience store market reaching saturation, companies are venturing into new territories. Each company is prominently featuring K-Food and private brand (PB) products, receiving explosive responses from local consumers.

◆ Store Expansion Beyond Domestic Borders = According to the convenience store industry on the 20th, CU had 213 stores in Mongolia as of last month. About four years after entering Mongolia in 2018 through a master franchise (MP) partnership with local partner Central Express, the number of stores surpassed 200. Central Express aims to open 300 stores by the first half of 2023. In Malaysia, CU has been operating 90 stores since opening its first store in April last year. There are plans to gradually convert the stores of local partner MyNews Holdings’ convenience store brand, MyNews.com, into CU stores.

GS25 entered Mongolia last year in partnership with local partner Shunkhlai Group, which ranks second in Mongolia’s business circles and holds about 70% market share in the liquor and beverage market. Currently, GS25 operates 65 stores in Mongolia and aims to open 500 stores by 2025. In Vietnam, GS25 has 160 stores and opened its first franchise store for the general public last December. GS25 Vietnam’s mid-to-long-term goals include turning profitable by 2025 and opening 700 stores by 2027.

Emart24 opened its first store in Malaysia in June last year in partnership with local company United Frontiers Holdings and currently operates 17 stores. The plan is to expand to 30 stores by the end of this year and to 300 stores within the next five years. Convenience stores are entering overseas markets not through direct investment but via the MP model. They entrust operations to local partners and supply only the brand, business know-how, and products, receiving royalties in return.

Customers are eating ready-to-eat meals at Emart24 in Malaysia.

◆ K-Food and PB Products Captivating Locals = K-Food and PB products have become the main offerings in overseas convenience stores. At CU Mongolia, the instant brewed coffee “Get Coffee” sells an average of 200 cups per store per day, making it the most popular item. This figure is more than ten times the sales volume in Korea. Additionally, Korean-style instant cooked foods such as hot dogs and toast have high sales, and local foods like Mongolian steamed buns called boz and traditional fried dumplings called khushuur have been developed as products, receiving positive responses. In Malaysia, instant cooked and ready-to-eat foods such as tteokbokki and gimbap, along with PB products, account for more than 70% of store sales.

At GS25 Mongolia, instant chicken has become a popular product among locals who prefer meat, and fresh milk lattes combining fresh milk favored by nomads with GS25’s coffee brand Cafe25 are also well received. In fact, chicken25, Cafe25, and ready-to-eat meals account for more than 50% of total sales in Mongolia. In Vietnam, instant tteokbokki, steamed buns, and rabokki consistently rank within the top five in sales. GS25 stores in Mongolia and Vietnam operate a PB brand zone called Yours, where products like Omori Kimchi Stew Ramen and Gonghwachun Jjajangmyeon can also be found.

In Emart24 Malaysia, K-Food such as cup rice, tteokbokki, and fried chicken accounts for 50% of total sales. Considering that instant food products account for only 10-20% of sales domestically, this is a very high figure. Ippresso brewed coffee and Emart24’s PL product I’m E are also receiving strong responses. An Emart24 official said, “Starting with Malaysia, where expansion is proceeding as planned, we are reviewing and executing entry into various countries. We will do our best to become a global convenience store brand.”