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Korean convenience stores thrive in Mongolia through restroom access and K-food popularity www.biz.chosun.com
The emergence of convenience stores in South Korea was a "toilet revolution" for Mongolians. With few or no restrooms at all in Mongolia, where traditional toilets are predominant, the free access to restrooms encourages frequent visits to convenience stores and has made them accustomed to consuming Korean food products, including ready-to-eat meals.
On the morning of Oct. 31, near Ulaanbaatar, Mongolia, South Korean convenience store giants GS25 and CU stood side by side. Inside the CU store, customers were seen purchasing refrigerated ready-to-eat meals to heat in microwaves or brewing coffee at a coffee machine, showcasing a scene similar to that in South Korea. Many also used the restrooms installed inside the store.
South Korean convenience stores are expanding overseas, with Mongolia being a prominent example. As of the 16th, there are more than 1,300 South Korean convenience stores abroad, with over 700 located in Mongolia. The localization strategy that combines highly popular K-food with an overseas presence is proving successful. The headquarters of South Korean convenience stores are utilizing local companies as intermediate franchise operators to attract customers.
Currently, CU and GS25 operate 441 and 267 stores in Mongolia, respectively. These convenience stores can be easily found across Mongolia, earning them the designation of the most successful expansion country.
CU was the first company to enter the Mongolian market. In August 2018, it opened its first store, CU Shangria, in Ulaanbaatar, Mongolia. It signed a franchise contract with Central Express, a major Mongolian retail company.
GS25 intensified its entry into Mongolia starting in 2021. It partnered with the second-largest Mongolian conglomerate, Shunkhlai Group. Beginning with three stores in 2021, the number has recently grown to 267. GS25 aims to increase its number of stores in Mongolia to 500 by the end of this year. Both brands have developed the convenience store market in Mongolia based on the popularity of Hallyu and K-food.
More than 60% of Mongolia's population is under the age of 35. With young people being the primary consumers and urbanization progressing, the response to South Korean convenience stores is enthusiastic. An industry insider noted, "Mongolia has a high favorability towards South Korea and is a promising emerging market with significant growth potential, leading to a strong preference for South Korean food and consumer goods."
For the South Korean convenience store industry, which faces growth limitations in the domestic market due to an aging population and intense competition, Mongolia serves as a foothold for global expansion.
Locally, South Korean convenience stores also play a role in providing infrastructure such as public restrooms. Mongolia still lacks sufficient public infrastructure, making the shortage of public restrooms in urban areas a serious issue. In response, CU and GS25 have installed restrooms inside their stores and opened them free of charge, regardless of customer purchases. This service is not offered in local supermarkets. Beyond selling ready-to-eat meals and beverages, this strategy enhances consumer convenience.
As a result, the perception of South Korean franchise convenience stores among Mongolians has improved. The availability of restrooms has increased store visit frequency and created a virtuous cycle where visits lead to purchases. Ouyuka, 32, who works in the transportation industry, said, "GS25 and CU are not just places to buy goods but are perceived as "comfortable resting places" where one can use clean restrooms." They added, "Young people in Mongolia all enjoy consuming at convenience stores."
However, the overseas expansion of South Korean convenience stores is still in its early stages. Currently, the overseas sales proportion of domestic convenience store companies is only about 4%. An industry insider said, "To generate revenue from royalties, convenience store headquarters must diversify their overseas expansion countries and explore new markets." As of now, domestic convenience stores have expanded primarily into Asian countries such as Mongolia, Vietnam, Malaysia, and Singapore.
Published Date:2025-01-16
