BGF to vigorously expand convenience stores in Kazakhstan

BGF Retail Co., South Korea’s biggest convenience store chain operator, will expand aggressively in Kazakhstan, creating the potential to crank up its overseas sales by up to 50% this year, an executive said on Wednesday.

BGF, which opened its first convenience store in the Central Asian country last month, plans to boost the number of CU stores there to 50 by year's end and to 500 by 2029, said Lim Hyung Keun, the company’s head of overseas business. The company has already opened three more shops since the launch.

“Almaty, with a population of more than 2 million in its metropolitan area, is well urbanized,” Lim told The Korea Economic Daily in an interview. “But, though K-food is popular, the city has few proper convenience stores.”

“Average sales per customer in Kazakhstan is around the mid-7,000 won ($5.60), topping the 6,000 won average in Korea. The number of customers there is higher," he added. 

To expand its business in the country, BGF has set up a logistics center there that manufactures home meal replacements. It is the first retailer in Kazakhstan with such a center.

K-FOOD

CU stores have been growing increasingly popular in the country by offering a variety of Korean foods, Lim said. 

“About 500 to 600 fresh food items such as gimbap are sold daily at local CUs,” he said, referring to rice rolls wrapped in seaweed. In Korea, CU shops sell an average of 40 fresh food items daily, he said. 

BGF has long-term ambitions to dominate the Kazakhstani small retail store sector.

“An overseas business is very risky. But expansions in other countries can hit the jackpot if it has high population density, is urbanized, and has proper local partners,” he said. “Kazakhstan has all of them.”

BGF aims to boost its overseas sales by 50% this year, to 300 billion won, Lim said.

Korean convenience store chain operators have been venturing overseas by leveraging the global interest in Korean culture and foods.This comes as Asia’s fourth-largest economy loses steam due to its extremely low birthrate.

“People in other countries are becoming familiar with Korean culture through new K-foods at CU stores,” Lim said. “CU will perform the role of not only a retail store but also a private diplomat.”

Write to Young Chan Song at 0full@hankyung.com
 
Jongwoo Cheon edited this article.