South Korea’s GS Retail will open its first convenience store location in Vietnam.
The operator of supermarket chain GS25 said the first of four stores would open their doors from halfway through January 2018, in the nation’s metropolis Ho Chi Minh.
In partnership with Vietnamese underwear retailer SonKim, the retailer will open up to 50 more stores later this year, before entering the capital Hanoi by 2020.
The Korean retail giant said it plans to open more than 2,500 stores over the next ten years in Vietnam, a market where growth potential is high.
Vietnam’s convenience store market has been posting annual growth of some 70%, according to an article posted by Korea Herald.
The rise is attributed to the millennial population increase in Vietnam, which counts 34.6% of its total population as aged in their twenties and thirties.
Millennials are known for their impulse purchasing and high disposable income, factors that suit the convenience store market. Online shopping is also on the rise. E-commerce sales in the country were estimated to grow 25% in 2017, from $5 billion in 2016.
GS Retail forecasts annual earnings to hit tens of billions of won from loyalties and also dividends, on the back of the recent joint venture with Son Kim.
In July 2017, Son Kim sold a 30% stake to GS Retail, without disclosing the price paid for the chunk. The Korean firm later signed a master franchise agreement to receive royalties on trademark rights and operation.
Son Kim is one of the top three lingerie and underwear retailers in Vietnam. In addition to retail, the Ho Chi Minh City-based company also has property and media in its group portfolio.
GS Retail is one of the two largest convenience store operators in South Korea.