Korea’s CU convenience store chain coming to Mongolia

BGF Retail Co., the operator of South Korea’s largest convenience store chain CU, announced that it signed a franchise deal with a Mongolian company on Tuesday, as the company moves to accelerate its global drive amid fierce domestic competition.

Under the agreement, local retailer Central Express will take charge of investments and the operation of CU outlets in Mongolia with the plan to open its first store in Ulaanbaatar within this year, according to BGF Retail.

The Korean company views Mongolia as a promising market for the convenience store business, particularly since the number of people aged under 35 account for 65 percent of the total population.

“We will accelerate our expansion into emerging markets with high growth potential to become a global convenience store operator,” BGF Retail CEO Park Jae-koo said.

The announcement came five months after BFG Retail opened an outlet in Iran in the first overseas expansion for a local convenience store operator.

South Korea’s convenience store chain operators have been eyeing foreign opportunities, as the local market has become increasingly competitive with CU, GS25 and 7-Eleven convenience stores dominating the market.

The market size for convenience stores in South Korea surpassed 20 trillion KRW, or 18.2 billion USD, in 2016, going up by 18.6 percent from the previous year, according to industry data.