SEOUL, Jul. 10 (Korea Bizwire) — More South Korean convenience stores are set to launch in-house products as local retailers move to attract more consumers with price competitiveness, industry sources said Tuesday.
E-Mart24 Inc., the convenience store arm of South Korean retail giant Shinsegae, said it is planning to unveil its own private label product within this year. Ministop Korea Co., operator of Ministop, is set to launch its own branded products in September.
The moves are part of the companies’ broader efforts to find a breakthrough in the saturated convenience store landscape. The size of South Korean convenience stores private label product market is estimated to hover around 3.5 trillion won (US$3.15 billion).
CU, South Korea’s No. 1 convenience store chain, operated by BGF Retail Co., released its own brand, Heyroo, in 2015, and GS25, another major convenience store chain, joined the move with You Us in 2016.
BGF Retail said sales of its private label products rose 35.3 percent on-year in 2016. Last year’s revenue was up 19.1 percent from 2016.
GS Retail Co., operator of GS25, said sales of its private brand items accounted for 36.6 percent of its total revenue in the first half of this year, excluding revenue generated from cigarettes and services. The company has around 2,000 products under its private brand line.
Another major convenience store chain, 7-Eleven, said sales of its in-house products accounted for 35.9 percent of this year’s total revenue as of Sunday. It currently has some 1,500 products under its private brand.
“The companies will be able to survive in this saturated market only if they manage to secure consumers who are highly loyal to their private label products,” an industry source said.
The market size for convenience stores in South Korea surpassed 20 trillion won in 2016, up 18.6 percent from the previous year, according to industry data.