"Domestic Stage Is Narrow"... Expanding Overseas: 'K-Convenience Stores' (Comprehensive)

Local customers are shopping at the soft-opened Emart24 Malaysia 1st store ahead of its official opening on the 24th (Photo by Emart24).

[Asia Economy Reporter Kim Yuri] 'K-convenience stores' are accelerating their overseas expansion. As the number of convenience store outlets in Korea reaches 50,000, indicating a saturated market, efforts are being made to enter emerging markets with high growth potential. Following CU and GS25's localization efforts in Mongolia and Vietnam by promoting 'K-convenience store' products and services, Emart24 has also stepped into the Malaysian market.

◆"Crowded every day with K-food at the forefront"

Emart24 announced on the 23rd that it will open its first Emart24 Malaysia store (Kuala Lumpur Bangsar South branch) on the 24th in partnership with local company United Frontiers Holdings (U.F.H). After a soft opening starting on the 22nd for system testing, full sales will begin on the 24th. The company stated, "Although the situation may be fluid due to COVID-19, we plan to expand to 10 stores by the end of this year and up to 300 stores within five years."

Emart24 Malaysia has developed interior design and merchandise (MD) strategies tailored to the local culture, where most meals are eaten at restaurants due to the hot weather. The first Emart24 Malaysia store features a two-story layout with a floor area of 257㎡ (approximately 78 pyeong), equipped with 10 to 15 tables to accommodate 40 diners simultaneously. This store concept, rarely seen in Korean convenience stores, increases the number of tables to suit local culture.

For customers who enjoy beverages and desserts, the store offers over 20 types of drinks including brewed coffee, hot chocolate, and mint tea, serving also as a coffee specialty shop. Desserts available for immediate enjoyment include four types of snowflake bingsu made using Korean snowflake bingsu equipment and three types of soft ice cream.

Most importantly, efforts have been made to localize K-food. Emart24 Malaysia has strengthened K-food offerings that appeal to local tastes, including four types of Korean-style cupbap (bulgogi, chicken, tuna mayo, salmon), tteokbokki, fried chicken, and fried fish cakes. Korean-style RTE (Ready To Eat) foods such as gimbap, triangular gimbap, sandwiches, and salads are also sold to attract trend-sensitive young customers. With growing interest in K-beauty, a shop-in-shop Korean cosmetics zone has been separately established.

Employees at CU Malaysia's first store are preparing Korean-style instant cooked foods such as Dakgangjeong, hot dogs, and Tteokbokki (Photo by CU).

Domestic convenience stores that have already expanded overseas are also conducting marketing centered on K-food. CU's first store in Kuala Lumpur, Malaysia (CU Centrepoint branch), opened in April, has Korean products dominating its top-selling items. This store prepares and sells Korean-style instant cooked foods such as tteokbokki, fried chicken, and hot dogs on-site, with these items accounting for nearly 40% of total sales. CU said, "Given the high affinity for Korean culture locally, we prominently feature CU's private brand (PB) products and other Korean goods," adding, "We have brought distinctive Korean menu items and trendy products such as Jeonju bibim triangular gimbap, kimchi tuna gimbap, Seoul-style beef bulgogi lunchbox, and Inkigayo sandwiches."

GS25 is focusing on differentiating instant foods and processed products in markets like Vietnam, where it opened its 100th store in March. GS25 has created a PB product zone called YOU-US ZONE as part of its MD differentiation. GS25 stated, "Vietnamese customers show great interest in ramen categories popular at Korean GS25 stores, such as Omori kimchi stew ramen, Minions cheese ramen, and Gonghwachun jajangmyeon, as well as Korean-style snacks like injeolmi and tteokbokki-flavored treats and character beverages."

Vietnam GS25 is gaining local popularity by differentiating its instant cooked food category, offering not only K-food but also local dishes prepared on-site. The highest sales category at Vietnam GS25 stores is instant cooked foods prepared and sold directly at the store. This includes about 50 items ranging from K-food like tteokbokki, cupbap, and fried dumplings to Vietnamese local foods such as hot pot, banh mi, and banh bao.

Customers are flocking to the GS25 Mongol Nisrel store, which opened last month (Photo by GS25).

◆K-convenience store services such as delivery also 'localized'

Recently popular convenience store delivery services in Korea have been benchmarked in Mongolia. CU announced that the cumulative number of convenience store delivery orders in Mongolia surpassed 1.5 million within one year of introduction. CU's convenience store delivery, launched in May last year, has grown rapidly by more than 30% monthly due to increased demand amid COVID-19. As usage increased, the service was upgraded from phone orders to being integrated into the Mongolian CU membership application, allowing online use. CU said, "As delivery gained popularity, local small business owners have also inquired about partnerships," adding, "Delivery accounts for 25% of sales at CU Malaysia and is also popular there."

CU entered the Mongolian market in April 2018 by partnering with Mongolian company Central Express, becoming the first in the industry to do so. Starting with the opening of the first Mongolian CU store, CU Shangri-La branch in Ulaanbaatar in August 2018, there are now over 110 stores in Mongolia. Mongolian CU stores attract an average of 1,000 visitors per day per store, reflecting their popularity. The reasons for this popularity include the ability to enjoy meals, coffee, and desserts at convenience stores, as well as access to various convenience store services commonly available in Korea.

Vietnam GS25, observing that many Vietnamese customers travel by motorcycle, opened the industry's first 'motorcycle drive-thru' store. Customers on motorcycles can purchase simple items through a window facing the street without dismounting. GS25 explained, "While drive-thrus are common in Korea, this is a very innovative attempt in Vietnam and has received great customer response." At Mongolian GS25, lifestyle service platforms successful in Korea, such as Our Neighborhood Delivery and Half-Price Courier, are being developed in forms suited to the local market to expand the role of convenience stores as in Korea.

Industry insiders expect that domestic convenience stores will accelerate their steps toward overseas markets with high growth potential. As of the end of last year, the number of domestic convenience store outlets was 14,923 for CU, 14,688 for GS25, 10,501 for 7-Eleven, 5,165 for Emart24, and 2,607 for Ministop. The number of domestic convenience store outlets surpassed 40,000 in 2018, reaching saturation. Accordingly, while convenience stores focus on differentiation and strengthening their foundation domestically, they are expected to show interest in overseas markets with high growth potential. An industry official said, "As the impact of COVID-19 decreases due to vaccines, expansion into overseas markets with high growth potential will accelerate," adding, "Competition among K-convenience stores in overseas markets is also expected to become more intense."

This content was produced with the assistance of AI translation services.