CU Surpasses 400 Stores in Mongolia... First in Industry to Achieve Overseas Profitability

Opening 400th Store This Month... 6 Years Since Entry
Mongolian Local Partner Achieves 3.9 Billion KRW Operating Profit in H1
Two-Track Strategy of Quantitative and Qualitative Growth... From Consulting to Financing
"Will Spread Korean Culture and Convenience Store Value on the Global Stage"

CU, a convenience store operated by BGF Retail, announced on the 25th that it has opened its 400th store in Mongolia six years after entering the market in August 2018, achieving a profit in its overseas business for the first time in the domestic convenience store industry.

Premium Nexus (formerly Central Express), CU's partner company, disclosed on the 1st of this month that its first-half performance this year recorded sales of 286.1 billion Mongolian Tugrik (approximately 117.3 billion KRW) and operating profit of 9.6 billion Tugrik (approximately 3.93 billion KRW).

CU Surpasses 400 Stores in Mongolia... First in Industry to Achieve Overseas Profitability

Min Seung-bae, CEO of BGF Retail (left), and Adilbish Premium Group Chairman are taking a commemorative photo at the opening ceremony celebrating CU Mongolia's 400th store.
[Photo by BGF Retail]

CU emphasized that it is the first domestic convenience store to turn a profit in an overseas market. The domestic convenience store industry began expanding overseas to countries such as Mongolia and Vietnam starting in 2018.

CU entered the Mongolian market in 2018 by signing a master franchise agreement with Premium Nexus, granting the local company the rights to use the brand and operate the business while receiving royalties, marking the first entry by a domestic convenience store into Mongolia. The number of CU stores in Mongolia steadily increased as follows: 21 stores in 2018, 56 in 2019, 103 in 2020, 163 in 2021, 285 in 2022, and 380 in 2023. The expansion extended beyond Ulaanbaatar to 11 regions including Darkhan, Mongolia's second-largest city, reaching 400 stores this month.

Despite COVID-19 and the global economic downturn, CU Mongolia's annual sales grew by 12% each year on average. Premium Nexus attempted to list on the Mongolian Stock Exchange in 2021, achieving the largest IPO subscription in Mongolian history with about 10,000 applicants and a public offering amount of 40.1 billion Tugrik, currently ranking within the top 10 in market capitalization.

The rebound in CU's Mongolian performance is attributed to a 'two-track strategy' that simultaneously pursued both quantitative expansion and qualitative growth of the local business. From the beginning of its entry, CU dispatched domestic experts to transfer operational know-how to its partner and provided consulting on building business infrastructure. Additionally, funds were lent to ensure stable business operations.

Based on this, Premium Nexus built a food center for ready-to-eat meals and introduced a digital picking system used in Korea to the local logistics center. On the product side, CU combined Korean-style and localization strategies. It promoted coffee culture in Mongolia with its private brand (PB) coffee, 'get Coffee,' and exported popular 'K-Food' products such as craft beer, cream bread, and ramen. At the same time, local foods like Mongolian steamed buns called boze and traditional fried dumplings called khushuur were commercialized as convenience store products to enhance customer loyalty.

Policies for ESG (Environmental, Social, and Governance) also played a role in increasing local favorability. CU spread Korea’s child disappearance and abuse prevention reporting system called 'iCU' and installed open restrooms in most stores to improve convenience for customers facing difficulties due to insufficient social infrastructure.

Min Seung-bae, CEO of BGF Retail, said, "CU’s achievement as the first in the industry to record profits in overseas markets is a very historic milestone in the history of Korean convenience stores. We will continue to strive to promote Korean culture and the differentiated value of convenience stores on the global stage and grow into an export industry that contributes to the national economy."

Meanwhile, as of July, CU operates 145 overseas stores in Malaysia and 7 in Kazakhstan in addition to Mongolia. In November last year, CU became the first in the industry to surpass 500 global stores and achieved 100 million annual visitors locally.