Overseas Stores Top 1,800... K-Convenience Chains Accelerate Push into Emerging Markets

CU: 915 Stores; GS25: 740; emart24: 153
Competition Expands to Cambodia After Mongolia and Vietnam

The number of overseas stores operated by South Korea’s three major convenience store chains has surpassed 1,800. K-convenience stores, which have expanded primarily in Mongolia and Vietnam, are accelerating their overseas expansion into emerging markets such as Cambodia. As growth in the domestic market slows, competition to gain a foothold in overseas markets is also intensifying.

According to the convenience store chains on October 19, CU, GS25 and Emart24 had a combined 1,808 overseas stores at the end of September. The chains’ overseas expansion, which began in earnest around 2018, has surpassed 1,800 stores in about eight years. CU, operated by BGF Retail, had the most, with 915 stores, followed by GS25, operated by GS Retail, with 740, and Emart24 with 153.

CU, which leads in the number of overseas stores, is expanding its business primarily in Mongolia. At the end of September, it operated 915 stores in total: 653 in Mongolia, 185 in Malaysia, 72 in Kazakhstan and five in Hawaii, United States. In Mongolia in particular, CU is strengthening its market position by building operational infrastructure, including local food and logistics centers. CU aims to open its 1,000th overseas store in the first half of next year and plans to expand into at least five countries by 2028.

GS25 is expanding its overseas business around two main markets: Vietnam and Mongolia. At the end of September, it operated 740 stores in total, including 448 in Vietnam and 292 in Mongolia. In Vietnam, it became the leading convenience store chain by number of outlets in the south, centered on Ho Chi Minh City, before entering Hanoi last year and expanding into the northern market. The company plans to expand its store network into the central region as well. If it also enters Cambodia, the number of countries in which it operates overseas will rise to three.

Local sales are also growing rapidly, driven by store expansion. GS25’s sales in Vietnam rose about 51-fold, from 2.957 billion won in its first year of operations in 2018 to 150.199 billion won last year. Sales in Mongolia also increased about 26-fold, from 4.167 billion won in 2021 to 107.167 billion won last year. The strategy of combining Korean-style ready-to-eat foods with products tailored to local tastes is seen as contributing to sales growth.

Emart24 is a later entrant, but is rapidly expanding its store network, particularly in emerging markets. At the end of September, it operated 153 stores in total: 110 in Malaysia, 42 in Cambodia and one in India. In Cambodia, where it was the first South Korean convenience store chain to enter, it plans to increase its store count to more than 70 by the end of the year. It is targeting local consumers with K-street food such as tteokbokki and cup rice. If GS25 enters the Cambodian market, competition between the two chains is expected to intensify.

Increasing the contribution of overseas operations to earnings remains a challenge. Even CU, which has the largest number of overseas stores, derives only around 4% of its total sales from overseas operations. Observers say that for overseas store expansion to become a genuine growth driver, it must be accompanied by higher local sales and improved profitability.

An industry official said, "As South Korean convenience store chains begin competing in the same overseas markets, it may become difficult to stand out through K-food and Korean-style store operations alone. The key will be improving operational efficiency by developing products suited to local consumers’ purchasing power and food culture, as well as building logistics networks and expanding franchise operations."

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