SEOUL, April 17 (Korea Bizwire) — BGF Retail Co., the operator of South Korea’s largest convenience store chain CU, said it signed a franchise deal with a Mongolian company on Tuesday, as the firm moves to accelerate its global drive amid fierce domestic competition.
Under the agreement, local retailer Central Express will take charge of investments and the operation of CU outlets in Mongolia, with the plan to open its first store in Ulaanbaatar within this year, according to BGF Retail.
Mongolia is a promising market for the convenience store business with the number of people aged under 35 accounting for 65 percent of the total population, the Korean company said.
“We will accelerate our expansion into emerging markets with high growth potential to become a global convenience store operator,” BGF Retail CEO Park Jae-koo said.
The announcement came five months after BFG Retail opened an outlet in Iran in the first overseas expansion for a local convenience store operator.
South Korea’s convenience store chain operators have been eyeing foreign opportunities, as the local market, dominated by three chains — CU, GS25 and 7-Eleven — has become increasingly saturated.
The market size for convenience stores in South Korea surpassed 20 trillion won (US$18.2 billion) in 2016, up 18.6 percent from the previous year, according to industry data.