[Convenience Store Empire] Expanding Territory Overseas... Leading the K-Distribution Sector

⑪Convenience Stores Expanding Globally

CU Surpasses 300 Stores in Mongolia
GS25 Targets 700 Stores in Vietnam by 2027
Emart24's K-Food Sales Account for 50%

The convenience store industry is accelerating its overseas expansion into countries such as Mongolia, Malaysia, Vietnam, and Singapore. This move comes as the domestic convenience store market has effectively reached saturation, prompting companies to pioneer new markets. Each company is prominently featuring K-Food and private brand (PB) products, receiving explosive responses from local consumers.

Speeding Up Overseas Store Expansion

According to the convenience store industry on the 13th, CU has 300 stores in Mongolia as of this month. This is the first time a domestic distribution company has opened 300 stores in a single foreign country. CU entered Mongolia about five years ago in 2018 through a master franchise (MP) agreement with local partner Central Express and has since surpassed 300 stores. CU holds a dominant 70% market share in Mongolia’s convenience store sector, ranking first in the industry. Additionally, CU opened its first store in Malaysia in April 2021 and currently operates 130 stores. Stores have been opened mainly in Kuala Lumpur and other major cities, with a goal of opening over 500 stores within the next five years.

GS25 operates 150 stores in Mongolia and plans to open 280 stores this year and 500 stores by 2025. GS25 entered Mongolia in 2021 through collaboration with local partner Sean Collie Group. In Vietnam, GS25 is accelerating store expansion in partnership with local distributor KK Group. GS25 currently operates 212 stores in Vietnam and aims to reach 300 stores this year and 700 stores by 2027.

Emart24 opened its first store in Malaysia in June 2021 in partnership with local company United Frontiers Holdings and currently operates 36 stores. It plans to expand to 80 stores by the end of this year and 300 stores by 2027. In December last year, Emart24 partnered with Singaporean company Emart24 Singapore Pte. Ltd. to open its first and second stores in Singapore. The plan is to expand to 10 stores by the end of this year and 300 stores within 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 purchasing products at the CU Tengkiera branch in Malaysia.
[Photo by BGF Retail]

K-Food and PB Captivate Locals

K-Food and private brand (PB) products have become the main offerings in overseas convenience stores. CU Mongolia’s store sales increased by 48% year-on-year last year. In particular, ready-to-eat meals saw a 117.4% sales increase, and freshly brewed coffee recorded a high sales growth rate of 120.2%. Additionally, local foods such as Boz, a Mongolian steamed bun, and Khushuur, a traditional Mongolian fried dumpling, have been developed as products and received positive responses. In Malaysia, ready-to-eat meals and PB products account for 75% of total store sales.

At GS25 Mongolia, ready-to-eat chicken has become a popular product among locals who prefer meat, and fresh milk lattes combining fresh milk favored by nomads with Cafe25 coffee beans have also been well received. In Vietnam, ready-to-eat tteokbokki, spicy chicken rice balls, and chicken lunch boxes rank high 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.

At Emart24 Malaysia, K-Food such as cup rice, tteokbokki, and fried chicken accounts for 50% of total sales. Considering that ready-to-eat food products account for only 10-20% of sales domestically, this is a very high figure. More than 60% of the product assortment in Singapore stores also consists of differentiated Korean-style products.

Professor Eunhee Lee of Inha University’s Department of Consumer Studies analyzed, "Although the domestic convenience store market is saturated, the industry’s competitiveness has increased accordingly. Especially because they effectively target the younger generation with trendy products, they seem to believe they have a good chance of success in expanding into Asian markets."