Korean retailers accelerate overseas expansion, betting on K-culture
Lotte Mart, Emart and major convenience chains are expanding in Vietnam, Mongolia and beyond as weak demand at home drives a broader bet on fast-growing markets and K-branded goods.
The newly opened Korean supermarket chain Lotte Mart's Vietnamese store booms with people in Tay Ninh on July 9.LOTTE MART
Korea’s major discount chains and convenience store operators are accelerating their expansion across emerging Asian markets, betting on growing demand for Korean food, cosmetics and other K-branded products as sluggish domestic consumption pushes them to seek new sources of growth.
Local hypermarket chain Lotte Mart opened a store in Tay Ninh, an emerging industrial city in southern Vietnam, on Thursday. Spanning one basement level and one ground floor, with a sales area of about 2,165 square meters (23,303 square feet), it marks Lotte Mart's first new store in Vietnam in about three years since the West Lake Hanoi store. It now operates 16 stores in the Southeast Asian country.
The Tay Ninh store caters to both residents and tourists, and aside from general groceries, offers a selection of Korean food and beauty products. Groceries make up about 88 percent of the product lineup, including roughly 1,500 varieties of Korean goods and about 300 varieties of prepared foods spanning Korean food and local cuisine. The store also features a section selling around 400 varieties of Korean cosmetics.
Lotte Mart currently operates 64 stores overseas, including 48 in Indonesia. "We plan to accelerate store expansion, including opening a new store in Bac Giang, Vietnam, within this year," said Shin Ju-baek, head of Lotte Mart and Lotte Super Vietnam.
Emart, another major hypermarket chain, is set to open its second private label No Brand store in Mongolia by the end of this month. The company aims to open 50 No Brand stores in Mongolia within 10 years. Emart operates six stores in Mongolia, including No Brand. No Brand has four stores in Laos and one in Thailand.
A CU outlet in MongoliaCU
Korean convenience store chains have collectively surpassed 1,700 overseas outlets. CU operates a total of 855 stores abroad, including 603 in Mongolia, 184 in Malaysia, 65 in Kazakhstan and three in Hawaii, and aims to surpass 1,000 overseas stores by the first half of next year. GS25 operates 742 stores across Vietnam and Mongolia, while Emart24 runs 135 stores across Malaysia, Cambodia and India.
Korean retailers are concentrating on emerging Asian markets, drawn by high growth potential and strong demand for Korean brands.
Lotte Mart Vietnam reported first-quarter revenue of 134.3 billion won ($89.31 million) and operating profit of 16.9 billion won this year, up 15.3 percent and 34.8 percent, respectively, from a year earlier. Domestic consumption, by contrast, has shown limited growth for discount chains as spending shifts increasingly online. According to the Ministry of Trade, Industry and Energy, discount store sales fell 5.1 percent in May from a year earlier, while e-commerce sales rose 8.8 percent.
Discount chains had previously expanded aggressively into China, but withdrew after operations were severely disrupted by retaliation following the 2017 deployment of the Terminal High Altitude Area Defense missile system.
"Emerging Asian markets carry fewer political and diplomatic risks than China, and rising household incomes are rapidly shifting consumption from traditional markets and small shops toward modern discount stores and convenience stores," an industry representative said.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
