CU (South Korea) Convenience Store Chain to Open in Vietnam
26 Sep 2019 - BGF Retail Co., operator of South Korea’s major convenience store chain CU, has ventured into Vietnam, its second offshore outreach after Mongolia.
The company said Tuesday it has signed a master franchise contract with CUVN, a Vietnam-based convenience store operator backed by local Vietnamese companies including retailer SNB. Under the master franchise deal, BGF Retail - the franchiser - will share its brand and business knowhow in convenience store operation with its Vietnamese partner that will be responsible for investment and operations.
A master franchise contract is preferred because it can reduce the risk and investment costs for the franchiser in a new market while guaranteeing a steady loyalty income. BGF Retail also entered Mongolia last year under a master franchise deal with a local company.
BGF Retail and CUVN aim to open their first Vietnamese outlet by June next year.
The Korean convenience store operator expects its experience of successfully launching Korean style convenience stores in Mongolia would help gain a strong foothold in the Southeast Asian market with high growth potential.
The company pins high hope on the Vietnamese market whose economy has been expanding 6.8 percent on average every year in recent years. Also, people below 30 years old make up about half of Vietnam’s near 100 million population.
Park Jae-koo, chief executive of BGF Retail, said the company will continue overseas expansion by making forays into fast-growing emerging markets. For the domestic operation, the company will focus on improving overall business health.
Pulse by Maeil Business News Korea