CU, GS25, 7-Eleven seek growth abroad

The Korea Times - - BUSINESS - By Kwak Yeon-soo [email protected]­re­atimes.co.kr

Con­ve­nience store chains are mo­bi­liz­ing more re­sources to es­tab­lish a larger pres­ence abroad as they strug­gle with slug­gish con­sump­tion and in­ten­si­fy­ing com­pe­ti­tion at home, ac­cord­ing to in­dus­try of­fi­cials Tues­day.

Ac­cord­ing to data from the Korea As­so­ci­a­tion of Con­ve­nience Store In­dus­try, Korea was home to 40,950 fran­chise con­ve­nience stores at the end of 2018, com­pared to 37,800 a year ear­lier.

BGF Re­tail, which op­er­ates CU con­ve­nience stores, an­nounced it signed a mas­ter fran­chise deal with Viet­namese con­ve­nience store op­er­a­tor CUVN on Sept. 24.

A mas­ter fran­chise deal is pre­ferred be­cause it can re­duce risk and in­vest­ment costs while re­ceiv­ing steady loy­alty in­come.

Un­der the agree­ment, BGF Re­tail will pro­vide know-how on its brand man­age­ment sys­tem while its part­ner CUVN will be re­spon­si­ble for in­vest­ment and op­er­a­tions.

The com­pany said it plans to open its first CU out­let in Viet­nam next year.

“We will ac­tively tap into emerg­ing mar­kets that have high growth po­ten­tial while fo­cus­ing on sta­ble growth in Korea,” a BGF Re­tail of­fi­cial said.

The of­fi­cial said that the Viet­namese mar­ket looks lu­cra­tive be­cause the coun­try has been record­ing a has seen brisk sales of snacks thanks to the soar­ing pop­u­lar­ity of K-pop in Viet­nam.

Young mil­len­ni­als in Viet­nam have shown grow­ing in­ter­est in the snacks K-pop stars re­port­edly en­joy, like Honey But­ter Chips and Idol Sand­wiches.

“There are cur­rently 45 GS25 out­lets in Viet­nam, and we plan to in­crease the num­ber of out­lets to 2,000 by 2028,” a GS25 of­fi­cial said.

Korea Seven, the lo­cal op­er­a­tor of the 7-Eleven chain, an­nounced re­cently it will ex­port five types of its pri­vate brand snacks, in­clud­ing Tteok­bokki Snack and Sour Cream &Onion Pop­corn, to Hawaii.

The com­pany said it plans to ex­port Korean snacks to three or four South­east Asian coun­tries within this year.

“We plan to uti­lize our global net­work to in­crease the va­ri­ety of our ex­port prod­ucts,” a 7-Eleven of­fi­cial said.

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