First South Korean convenience store chain to enter Vietnam

First South Korean convenience store chain to enter Vietnam

Quoc Hung

HCMC – GS Retail Co Ltd, a South Korean convenience store chain operator, is about to penetrate the Vietnamese market under a partnership with a local company.

The Korean firm struck a deal with Son Kim Group to set up a joint venture with a plan to launch its first GS25 store in HCMC later this year, according to the Yonhap news agency.

GS Retail, which holds a 30% stake in the joint venture, is expected to sign a master franchise agreement with its Vietnamese partner later to receive royalties on trademark rights and operation.

Vietnam will become GS Retail’s first foreign market, according to the Inside Retail Asia.

“We received requests from many countries, including China and other Southeast Asian countries, to export our brand. After months of research, we concluded that Vietnam has the largest potential for growth,” said a GS Retail spokesman.

GS Retail, according to the Business Korea, chose Vietnam as its first overseas market, as the Vietnamese economy is growing rapidly and those aged 35 or less take up no less than 57% of its population, a demographic seen as favorable as youth tend to most likely shop at convenience stores.

Korean media says an increasing number of Korea’s convenience store chains are creating a presence in overseas markets. As their domestic convenience store market is reaching a saturation point, they are exploring foreign markets to secure business growth.

Vietnam’s large population and rising consumer spending have encouraged a number of international convenience stores to come.

GS Retail is regarded as the first Korean convenience store chain operator to enter Vietnam. Earlier, the American-Japanese international chain of convenience stores 7-Eleven made debut on the Vietnamese market in June with four stores already opened in HCMC.

American consulting firm A.T. Kearney said in its Global Retail Development Index that convenience stores and minimarts are the fastest-growing market segments in Vietnam.

GS Retail, which has become one of the leading distributors in South Korea, has diversified its brands, including GS25 (convenience store brand), GS Supermarket (provider of safe and fresh food products), Watsons (health & beauty specialist) and Parnas Hotel (hotel brand).

Meanwhile, Son Kim is one of the fastest growing companies in Vietnam with its business spanning from real estate, media to retail. It has been running home shopping business in partnership with GS Home Shopping Inc, GS Retail’s sister under GS Group since 2012.

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