Convenience stores

South Korean convenience stores make foray into Malaysia

Malaysian customers shop at CU’s 100th store in Perak, West Malaysia. (CU)

South Korean convenience stores are actively making inroads into Malaysia, a lucrative market based on growing local demand for consumer goods and convenience stores, as well as strong public interest in Korean cuisine.

Korean convenience store chain GS25 said on Monday it has partnered with KK Group, a retail giant in Malaysia, to open the first GS25 store there next year. The two agreed to expand to 500 locations in five years.

According to the GS25 report, Malaysia’s annual growth rate for consumer goods is 17%, while its convenience store business is growing at an average of 10%.

“Among Southeast Asian countries, Malaysia has the most advanced convenience store operating system and the greatest need to boost business,” a GS25 official said.

GS25 will receive royalties for licensing the brand to KK Group, which will be in charge of local operations.

The Korean company plans to launch local food products and pass on know-how in the manufacture and distribution of fresh products, including ready meals. It will provide meal kits with fresh ingredients paired with popular recipes and food items in Korea.

“We will provide food delivery service and other package deliveries at the cheapest rates, as we do in Korea,” the company said.

Malaysia is the third global market that GS25 will enter, following the launch of stores in Vietnam in 2018 and Mongolia in 2021.

Malaysian customers shop at E-mart24's 16th store in Kuala Lumpur, Malaysia.  (E-mart24)

Malaysian customers shop at E-mart24’s 16th store in Kuala Lumpur, Malaysia. (E-mart24)

CU, another Korean convenience store chain, recently announced the opening of its 100th convenience store located in Malaysia in Perak, in the northwest region of the country, since the opening of the first store in Kuala Lumpur the last year. The 198 square meter store aims to become a landmark in the local community, according to the company.

The chain operator originally planned to open 50 branches in a year, but eventually doubled that number. As an industry first for a Korean channel, CU operated 300 overseas locations.

In partnership with Mycu Retail, a Malaysia-based subsidiary of Mynews Holdings, CU currently operates branches in Kuala Lumpur, Johor Bahru, Melaka, Pulau Pinang and other major cities. The company plans to expand its presence in the eastern region, including Borneo, the world’s third largest island, and open more than 500 stores within five years.

“CU convenience stores are proving very popular in Malaysia. When the first branch officially opened, there was a 100-meter queue outside and 1,000 to 3,000 customers visited per day,” the company said.

In Malaysia, Korean food products account for more than 60% of total sales in stores run by Korean convenience store operators. In particular, about 4,000 tteokbokki (Korean spicy rice cake) products are sold per day, leading the sales list.

E-mart24, a convenience store chain of Korean giant Shinsegae, has launched its 20th store at Mitsui Outlet Park near Kuala Lumpur International Airport.

Last year, the company partnered with United Frontiers Holdings, a Malaysian retail group, and they set up stores featuring unique interiors with designs inspired by the landscapes and gardens of Kuala Lumpur. The company plans to open another 10 stores – for a total of 30 – by the end of this year.

E-mart24’s top-selling Korean snacks account for 70% of its total sales.

By Byun Hye-jin ([email protected])