Convenience Stores Rising as the 'Distribution Throne'... Domestic Market Is Narrow, Overseas Exports Booming

GS Retail Surpasses $9 Million in Exports Last Year
CU Exports $8 Million Annually as of 2023
Korea Seven Ships Over 200,000 PB Product Boxes Accumulated

The convenience store industry, which has emerged as a major player in the domestic distribution sector, is accelerating its overseas expansion. Not only are they opening stores abroad, but they are also exporting private brand (PB) products across the seas, building a 'Tower of Exports.'

According to the distribution industry on the 1st, GS Retail exceeded $9 million (approximately 13.2 billion KRW) in export performance last year. As of last year, GS Retail's export items reached about 600 types, and the export destinations included more than 30 countries across Europe, North America, the Middle East, Africa, and Asia. The company explained that especially due to the K-content craze, about 10 Netflix intellectual property (IP) partnership products achieved $2 million in export results, ranking first in overall export performance.

GS Retail X Netflix IP collaboration products launched at ParknShop in Hong Kong. Photo by GS Retail

GS Retail started with an export performance of 200 million KRW in 2017 and consecutively received the '3 Million Dollar Export Tower' in 2020 and the '7 Million Dollar Export Tower' in 2022. After surpassing $9 million in exports last year, the company has set a goal to achieve $10 million in exports in the new year.

CU, a convenience store operated by BGF Retail, also reached an annual export amount of $8 million as of 2023. The products CU exports are mainly PB items, focusing on ramen, snacks, and beverages. Exports are conducted to about 20 countries including the United States, China, the United Kingdom, the Netherlands, Mongolia, Vietnam, Malaysia, C?te d'Ivoire, and Kyrgyzstan, with sales mainly generated through overseas CU stores. CU emphasized that Korean products, including PB items, account for half of the total sales at overseas stores, indicating high preference.

Korea Seven, which operates the convenience store 7-Eleven in Korea, is also conducting exports centered on PB products. 7-Eleven began exporting PB snacks and gim (seaweed) in about 1,300 boxes to 7-Eleven Malaysia at the end of 2015 and has continued exports since then. The countries 7-Eleven has exported to so far include Hawaii, Taiwan, and Malaysia, with a cumulative export count of 66 times and a scale of about 200,000 boxes.

The reason domestic convenience stores are putting effort into overseas expansion is that Korean products are gaining popularity in foreign markets as well. According to CU, the top-selling product in Mongolian local stores is CU's PB product 'get Vanilla Latte.' Additionally, three of the top 10 best-selling products are get coffee. CU also exports two types of the 'Yonsei Milk Cream Bread' series (Original, Choco), which were popular immediately after their release in Korea. GS Retail also expanded its sales channels to the United States and Australia by promoting related products such as dalgona and energy drinks ahead of the release of Netflix's original content 'Squid Game Season 2' last month.

Export volume of private brand (PB) products from 7-Eleven operated by Korea Seven. Provided by 7-Eleven

They are also accelerating the opening of overseas stores, not just exports. As of November last year, CU operates a total of 597 stores overseas. Among these, there are 432 stores in Mongolia, 147 in Malaysia, and 18 in Kazakhstan. GS Retail's convenience store GS25 is also conducting business in Mongolia and Vietnam. GS Retail opens stores through a master franchise system with local companies, with store counts of 342 in Vietnam and 267 in Mongolia.

Meanwhile, the share of convenience stores in the domestic offline distribution industry is steadily increasing. According to the sales trends of major distribution companies from the Ministry of Trade, Industry and Energy, as of October last year, the sales share of convenience stores in distribution was 17.8%, surpassing department stores which recorded 17.2%. This marked the fifth consecutive month that convenience stores showed a higher sales share than department stores since June last year.