South Korean convenience store chain GS25 announced on Thursday that it has become the top operator in southern Vietnam, surpassing rivals US' Circle K and Japan's FamilyMart, five years after its market debut.
GS25 Vietnam, a subsidiary of GS Retail, launched its first Vietnam store, the GS25 Empress Tower branch, in Ho Chi Minh City in January 2018. As of last month, it now operates 211 stores in the region, despite entering the market after its foreign competitors.
While still second to Circle K in terms of national store count, GS25 Vietnam has pursued an aggressive growth strategy, continuing to open stores even amidst the COVID-19 pandemic.
The chain has achieved significant success in local market development, with its store opening success rate (measured as accuracy within a 10% margin of expected sales) soaring from 71% in its first year, to over 90% in 2023. GS25 also reports steadily improving operating profits and projects profitability by 2026.
GS25 Vietnam became the first brand convenience store in the country to develop franchises in 2021 and currently runs 16 franchises. In a move set to expand franchise development further, it plans to introduce three new franchise models in September, designed to enable startups at a lower investment cost.
Looking ahead, the company aims to extend its footprint to Binh Duong, Dong Nai, and Vung Tau, in addition to Ho Chi Minh, targeting a larger regional market.
GS Retail's Vietnamese partner, Sonkim Retail, secured an additional $20 million in business funding through an investment from the International Finance Corporation (IFC), a subsidiary of the World Bank, in June. This funding boost is seen as a recognition of GS25 Vietnam's aggressive growth and successful merging of Korean food culture with local tastes.
GS25 Vietnam's early offerings, such as popular Korean-style cooked foods like tteokbokki (spicy rice cakes), led to increasing sales. More recent additions to their menu, including Chicken25 and skewered instant cooked food, have further bolstered sales of cooked food in the first half of this year.
Write to Young Chan Song at
0full@hankyung.com
