[Interview] K Convenience Store Blossoming in Southeast Asia... The Two Hidden Key Players

[K-Convenience Store Global 1000th Store Era]⑤
Jung Hyun-seok, BGF Retail Team Leader "Advancing K-Food Localization"
Lim Baek-hyun, Emart24 Manager "Differentiating Street Food"

Editor's NoteSince convenience stores first set foot in Korea in 1982, they have absorbed various lifestyle convenience services and developed into a representative retail format in the Korean distribution industry. Beyond being stores where groceries and daily necessities can be purchased, they also serve roles of post offices, banks, and pharmacies. However, challenges are not easy. The saturation of the convenience store market, population decline, and other complex factors have combined to reduce growth momentum. Accordingly, domestic convenience stores are seeking answers to these challenges overseas. Asia Economy visited overseas sites of Korean convenience stores and examined the tasks faced by the convenience store industry: pioneering overseas markets and improving profitability in the domestic market.

In Malaysia, it is no exaggeration to say that the convenience store market is practically cultivated by Japan. In terms of the number of stores, 7-Eleven leads with about 2,400 stores, more than four times the second-place MyNews.com with about 600 stores. In terms of sales, FamilyMart has almost monopolized the top spot since entering in 2016. CU challenged this market in 2021.

Jung Hyun-seok, Head of BGF Retail Malaysia TFT Team

Jung Hyun-seok, head of CU Malaysia TFT team, is conducting an interview with our newspaper at the Mid Valley Megamall store in Kuala Lumpur. Photo by Seongpil Jo @gatozz

Jung Hyun-seok, head of BGF Retail Malaysia TFT team, who oversees CU store openings and management locally in Malaysia, said in an interview with this publication at the Mid Valley Megamall store in Kuala Lumpur, "We anticipated that Japanese food culture, which has long been established in Malaysia, would not be attractive to the local young generation seeking novelty," adding, "We judged that if we sell K-food, which is creating a global boom, with good cost-effectiveness, there is a possibility of success."

CU opened its first store in April 2021 and surpassed 100 stores in just 1 year and 3 months, setting the record for the fastest expansion in Malaysia. Jung said the key to this smooth landing was, "We judged that we should not insist only on Korean food and products, so we developed Curry Laksa by incorporating local popular food, localizing the products. Currently, we are focusing on creating a convenience store where anyone can easily visit and purchase by harmonizing Korean and local products appropriately."

CU plans to expand its stores to 500 by 2026. However, even if the blueprint unfolds as planned, it still needs to catch up in terms of the number of stores and brand awareness compared to Japanese convenience stores. Jung said, "Although CU has fewer actual stores, the opening speed is 67 stores per year, faster than 7-Eleven (61 stores) and FamilyMart (52 stores). We will strive locally to ensure that the stores are not only numerous but also high-quality."

Lim Baek-hyun, Manager of Emart24 Overseas Business Team

Emart24 focused on food from the time it entered Malaysia. While alcohol sales dominate convenience stores in Korea, Malaysia is a Muslim cultural zone where alcohol is taboo. Lim Baek-hyun, manager of Emart24 Overseas Business Team, said, "We had no choice but to differentiate by focusing on street foods like cupbap and fried chicken, and fortunately, that strategy worked."

Im Baekhyun, Head of Overseas Business Team at Emart24, is taking a photo after conducting an interview with Asia Economy in Kuala Lumpur, Malaysia. Photo by Seongpil Jo @gatozz

The sales proportion of ready-to-eat foods at Emart24 stores in Malaysia exceeds 60% of total sales. In Malaysia, where the Korean Wave is in full swing, locals are attracted by the fact that they can experience street foods like cupbap, tteokbokki, and fried chicken without going to Korea. Lim said, "The Korean Wave culture has had a positive impact on local customers," adding, "There is a significant advantage stemming from impulses or curiosity about Korean culture formed by watching K-dramas and so on."

It was not smooth from the start. Muslims do not even touch food that is not halal, meaning 'permitted' in Islam. It is not simply about avoiding pork and alcohol. For example, tteokbokki made with gochujang containing alcohol from the fermentation process is also forbidden. It is considered prohibited by religious law. Emart24 also experienced trial and error in this regard. Lim said, "When we first researched the Malaysian market, we knew halal was important, but we did not realize it was this sensitive."

Emart24 is recently seeking differentiation in food products. For example, they have a ramen station where customers can select Korean ramen and cook it instantly with soft-boiled eggs, ham, and other toppings according to their preferences. Lim said, "We believe differentiation is the only way to survive," adding, "We are working to develop products that can only be seen at Emart24, and plan to sequentially introduce beverages, hotteok, and eventually K-chicken."

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