Expansion into Overseas
GS Retail’s convenience store brand GS25 enters the Vietnamese market. To this end, GS Retail and SonKim Group established a 30:70 joint venture on July 27. GS Retail is planning to launch the first GS25 in Vietnam in Ho Chi Minh City within this year after signing a master franchise contract.
Earlier, BGF Retail’s CU convenience store entered the Iranian market by signing a similar contract with Entekhap Investment Development Group.
“We chose Vietnam as our first overseas market in that its economy is growing very rapidly these days and those aged 35 or less take up no less than 57% of its population,” GS Retail explained, adding, “Our business in Vietnam is expected to lead to an annual profit of at least dozens of billions of won, including the royalties and dividend income.” GS Retail’s future targets also include China and Cambodia.
South Korean convenience stores’ global market penetration is to seek future growth opportunities. The size of the South Korean convenience store market topped 10 trillion won in 2011 and reached 20.4 trillion won last year.
With the ongoing recession of the domestic economy negatively affecting department stores and super supermarkets in South Korea, they showed an annual growth of 24.3% in 2015 and 18.6% in 2016. Still, the growth in the size of the market is resulting in intensifying competition and market saturation at the same time.