CU Achieves 200 Stores in Mongolia Four Years After Entry

by Jeon Jinyoung

Published 21 Apr.2022 07:02(KST)

CU achieves 200th store in Mongolia.

[Asia Economy Reporter Jeon Jinyoung] CU, the number one convenience store chain in Korea, has rapidly expanded its stores in overseas markets, reaching its 200th store in Mongolia about four years after entering the market. This is the first time a Korean retail company has opened 200 stores abroad.

According to industry sources on the 21st, Lee Geonjun, CEO of BGF Retail, attended the opening ceremony of CU's 200th store in Mongolia on the 20th, personally inspecting the local business status and sharing future business strategies and visions with Adilbish, chairman of Premium Group, CU's Mongolian partner, and Ganbold Chinjerik, CEO of Central Express.

The newly opened 200th store, ‘CU Boyangto Oka Branch,’ is located in a residential area near Boyangto Oka International Airport, about 12 km from the city center. This is the first store opened in the outskirts of Ulaanbaatar, and CU plans to further expand its store locations starting from this point.

It took about 26 months for CU to open 100 stores in Mongolia since its first entry in 2018, but only about 18 months to reach 200 stores. This means an average of about 5.6 stores opened per month, demonstrating steady business performance even amid the COVID-19 situation.

Recently, Mongolian CU also acquired local stores of the American convenience store chain Circle K. Circle K entered the Mongolian market about two months earlier than CU but decided to withdraw from the market last month after losing competition with CU, selling its local stores to Central Express.

CU has solidified its position as the number one convenience store chain in Mongolia with an overwhelming market share of over 70% based on the number of stores, boasting strong brand power to the extent that ‘convenience store’ is synonymous with ‘CU’ locally. The average daily customer count reaches 1,000, about three times that of Korea.

The reason CU could rapidly expand its stores in Mongolia in a short period is that it introduced a Korean-style convenience store model, offering differentiated products and services that were previously unseen, tailored to local consumer needs, thus leading new consumption trends in Mongolia.

Targeting diverse food demands, CU sells Korean-style ready-to-eat foods such as gimbap, as well as instant cooked foods like toast and hot dogs. It also successfully localized by developing local foods such as boze, a Mongolian steamed bun, and khushuur, traditional Mongolian fried dumplings, as convenience store products.

CU’s instant brewed coffee brand, GET Coffee, leads Mongolia’s coffee culture with an average daily sales of 200 cups per store. In response to the COVID-19 situation, CU also introduced convenience store delivery services, which gained great popularity with a cumulative usage of 1.5 million cases within a year.

Last year, Mongolian CU’s sales grew by about 80% compared to the previous year. Based on this performance, Central Express was listed on the Mongolian Stock Exchange in November last year, recording the largest IPO amount (40.1 billion Tugrik) and subscription number (about 10,000 people) in Mongolian IPO history.

CU has also spread the social infrastructure function of Korean convenience stores to Mongolia. It introduced ‘iCU,’ a child disappearance and abuse prevention and reporting system, to protect Mongolian children’s safety, and supports eco-friendly Gers (Ger, Mongolian traditional portable tents) through funds raised by the Love Coin Donation campaign conducted with franchisees in Korea.

After the opening ceremony, CEO Lee Geonjun personally practiced global ESG (Environmental, Social, and Governance) management by visiting eco-friendly Gers, actively promoting the public interest role of Korean convenience stores overseas.

CU plans to continue providing professional and systematic support to ensure stable growth of its Mongolian business. To this end, CU will introduce the ‘BGF Global IT System,’ developed by consolidating its accumulated IT know-how, locally in September.

Once applied, this system will enable real-time data sharing among local CU stores, logistics centers, and the franchise headquarters, allowing efficient management and organic collaboration, which is expected to further enhance business competitiveness.

Lee Geonjun, CEO of BGF Retail, said, “The opening of CU’s 200th store in Mongolia is a case that shows the possibility of Korea’s CU rising to a global standard by winning competition against global companies on the overseas stage.” He added, “As Korea’s number one convenience store brand, CU will actively explore new overseas markets based on the successful know-how accumulated domestically and internationally over the past 30 years.”

Meanwhile, Central Express aims to open 300 stores by the first half of 2023.