LVMC Holdings Signs Definitive Agreement for Emart's Entry into Laos

원본보기 아이콘

LVMC Holdings (KOLAO Group) announced on the 22nd that it signed a master franchise agreement with Emart, South Korea's largest distribution company, at the KOLAO Tower in Vientiane. LVMC Holdings, the largest private company operating locally in Laos, established a distribution business company, UDEE.CO., Ltd (hereinafter UDEE), for collaboration, with its subsidiary Autoworld (KDC) investing equity.

A master franchise is a method where the franchisor licenses the franchise business and brand operation rights to a local company through a contract, instead of directly entering overseas markets.

The signing ceremony was held with the attendance of LVMC Holdings Chairman Oh Se-young and Emart Global Business Division Head Song Man-jun, along with executives from both companies. UDEE, which signed the contract with Emart, plans to open one Emart store and three No Brand stores in the second half of this year. The company aims to open 20 Emart stores and 70 No Brand stores in the future, continuously expanding the business.

With the rising popularity of the Korean Wave and cost-effective premium products in the Southeast Asian market, the collaboration between Emart, known for its good quality and strong brand recognition, and LVMC Holdings is expected to serve as a foothold to expand the influence of K-distribution in Laos.

In particular, the brand positioning of No Brand is also expected to drive sales growth in the master franchise business. While it is considered a cost-effective product compared to national brand (NB) products in Korea, in Laos it is recognized as a premium Korean product of much higher quality compared to Chinese and Southeast Asian products, thus having a strong ripple effect.

LVMC Holdings (KOLAO Group) started its business in 1997 with automobile assembly and sales and currently operates a wide range of businesses including finance, platforms, construction, and leisure. Recently, it has been rapidly expanding by diversifying into retail distribution.

Leveraging its strong recognition in Laos and capabilities in real estate and logistics, the company started a new retail distribution business last year, opening the first Kok Kok Mega Mart (hypermarket) in March and the first Kok Kok Mini Mart (convenience store) in August.

Additionally, aiming to open 1,000 mini-mart stores by 2025, the company plans to expand its distribution network throughout Laos and open three large shopping malls in the DongDok, Patuxay, and Donchan areas of the capital, Vientiane. Among these malls, the first Emart store is scheduled to open within this year at the Patuxay Mega Mall, covering approximately 6,000㎡.

The number of small and medium-sized retail stores in Vientiane increased sharply from 25 in 2019 before COVID-19 to 149 by the end of 2023, a 496% growth, indicating a rapidly growing distribution market. In line with this trend, KOLAO Group recently acquired J-Mart, the market leader among major existing retailers such as J-Mart, D-mart, Sokxay, and Xokthavy, instantly becoming the number one supermarket operator in Laos.

With Laos gaining the ASEAN chairmanship this year and rising expectations for economic growth, the company is actively strengthening its business capabilities through strategic mergers and acquisitions reflecting consumer demand in new distribution businesses, collaboration with Emart, and the construction of large mega malls, seizing this opportunity without hesitation.

A company official stated, “The collaboration with Emart is expected to shake the foundation of large offline distribution in Laos,” adding, “This new attempt at change will increase the possibility of success through the convergence of online and offline distribution in the future and lead to additional sales growth for LVMC Holdings.”

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.