GS Retail to enter Malaysian convenience store biz with KK Group
KK Group Chairman Datuk Seri Dr. KK Chai, left, poses with GS Retail's Convenience Store Division head Jung Jae-hyung after signing a MOU at KK Group's headquarters in Kuala Lumpur on July 9. Courtesy of GS Retail
By Kim Jae-heun
GS Retail signed a memorandum of understanding (MOU) with Malaysia's KK Group to open its first GS25 convenience store in the Southeast Asian country next year, the Korean retail firm said Monday.
The two parties agreed on the master franchise contract and promised to open 500 stores over the next five years.
Malaysia is the third-largest ASEAN country with a per capita GDP of $11,400 (14.8 million won). The country is home to a population of 33 million and its convenience store industry has been growing by 10 percent annually.
Malaysia's fertility rate is about twice as high as Korea's, and the average age of the country's population is 28.5. GS Retail sees big potential in the market there, as young people are the main customers in the convenience store business.
The retail firm will target local consumers based on localized products that it has prepared before advancing into Malaysia.
The company plans to share its fresh food management system in the country, while providing a quick commerce service that it has implemented successfully in Korea. Quick commerce refers to delivery services that take less than an hour from the order to the completion of delivery.
“The company's MOU with KK Group served as an opportunity to show the world of the competitiveness that GS25 has accumulated over the past 30 years. We will continue with our global expansion plan based on the company's successful experiences in the convenience store business,” a GS Retail official said.
GS Retail first entered the global market in Vietnam in 2018. As of now, the company operates some 160 convenience stores there and it hopes to open 200 stores within this year as well as 700 stores by 2027.
Last May, GS Retail also advanced into the Mongolian market by opening three GS25 stores at one time there. There, the retailer offers distinguished products reflecting the local meat-eating culture. It currently operates 70 branches there and it hopes to double the number by the end of the year.