Gaining a ‘premium’ image from the Korean food wave
GS25, Vietnam 273 – Mongolia 245
CU also had 510 overseas stores as of the end of last year.
E-Mart 24 “Enter into Cambodia in the first half of this year”
The number of overseas stores of GS25 and CU, the ‘top two’ in the domestic convenience store industry, together exceeded the 500 mark. ‘K Convenience Store’, which has faced growth limitations due to stagnant domestic market, is looking for a way out by competing to dominate overseas markets.
On the 7th, GS Retail announced that the number of overseas stores of its convenience store GS25 had increased to 518 as of today. This is an increase of 20 in one week from 498 at the end of last year. By country, there will be 273 stores in Vietnam and 245 stores in Mongolia.
The overseas business, which started with 26 stores in Vietnam in 2018, has grown 20 times in just 6 years.
It is the second time for a domestic convenience store company to open its 500th overseas store, after CU in November last year. As of the end of last year, CU had 510 overseas stores.
GS25’s overseas sales in 2022 totaled 103.029 billion won, a 35-fold increase compared to 2018, its first year of entry. Although it accounts for only 1.3% of the total sales of 7.78 trillion won in the same year, the growth rate is rapid. CU’s overseas sales grew at an average annual rate of 12.0% between 2018 and 2022. E-Mart 24, which began opening overseas stores in 2021, is currently catching up by increasing the number of stores to 51.
The main target markets for domestic convenience store companies are Southeast Asia and Mongolia. GS25 is leading the market in Vietnam and E-Mart 24 is leading the market in Singapore. In Malaysia, CU and E-Mart 24 are competing, and in Mongolia, GS25 and CU are competing. In particular, in the case of Mongolia, competition among Korean convenience stores is the fiercest, with CU establishing itself first and expanding its business while GS25 is rapidly catching up.
An official in the convenience store industry explained, “Southeast Asia and Mongolia are both regions familiar with Korean-style convenience stores thanks to the Korean Wave.” The interpretation is that the convenience store culture, which often appears in Korean dramas and movies, has become popular with locals. In fact, after the airing of the drama ‘Convenience Store Morning Star’ (June to August 2020), for which GS25 was in charge of production support, sales in Vietnam increased by 30% compared to before.
Korean food marketing is also active. This is because Korean convenience stores are accepted by local consumers as a place where they can buy Korean food such as tteokbokki.
Five out of 10 popular products at CU Malaysia stores were Korean food, such as fried chicken and tteokbokki. At E-Mart 24, Korean food sales at overseas stores also exceed 50% of total sales. An official at E-Mart 24 said, “Korean food is gaining great popularity, with Korean snacks, which account for only 20% of snacks in local stores, accounting for 70% of snack sales.”
K convenience store, which promotes ‘Korean premium’, is also ahead of Japanese companies. According to the industry, the number of GS25 stores in Vietnam is second only to Circle K in the U.S. and is larger than Family Mart and Ministop in Japan.
An official from a convenience store company said, “Korea’s image is completely premium in Southeast Asia, with local companies first requesting that outdoor advertisements and shelves be written only in Korean.” He added, “Korea’s unique strength compared to companies in other countries such as Japan is in the hearts of local consumers.” “I bought it,” he explained.
Convenience store companies plan to continue expanding their global stores this year. GS25 said, “We will expand the number of stores to 1,000 by 2025.” The number of countries entering the market is also expected to increase. In the first half of this year (January to June), CU will enter Kazakhstan and E-Mart 24 will enter Cambodia.
An official in the convenience store industry said, “With strong overseas business expansion, competition between domestic companies in various countries will intensify in the future.”
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.