SEOUL -- BGF Retail, the operator of South Korea's major convenience store franchise CU, has opened its first store in Kazakhstan. The store is in Almaty, the Central Asian country's heart of trade with a population of some 2.1 million. BGF Retail aims to run more than 500 stores across the country by 2029.
BGF Retail announced that the first store was launched through a master franchise arrangement with CU Central Asia, the convenience store operator affiliated with Kazakhstan-based frozen confectionery product manufacturer Shin-Line. In master franchising, control of franchise rights is often entrusted to a local partner with a deeper understanding of market dynamics, in return for a substantial initial fee.
Shin-Line is the largest ice cream company in Central Asia, accounting for 40 percent of the ice cream market in Kazakhstan. The frozen confectionery product maker is striving to expand its business scope into other products such as instant noodles and dairy products. The company is recognized for its nationwide cold chain distribution network which allows fresh groceries to stay at the right temperature throughout their delivery phase, ensuring the quality of goods.
"Today, with this historic first step, I hope the CU store in Kazakhstan will grow into a leading convenience store brand in the nation and play a pivotal role as a gateway for exports for South Korea's small and medium-sized enterprises," BGF Retail's vice chairman Hong Jung-kuk said on March 6. The company will open two more stores in Almaty by the end of March 2024.
Meanwhile, BGF Retail has already expanded into markets in Mongolia and Malaysia. Convenience stores in South Korea also serve as cultural centers. While the stores offer daily necessities such as socks, and tee-shirts, they also sell Hallyu (Korean cultural wave)-related products like K-pop albums and South Korean snacks, drinks, and ready-to-eat foods such as Gimbab (rice, vegetables, and other ingredients wrapped in seaweed), and Tteokbokki (finger-sized rice cakes simmered in spicy and sweet red chili sauce).
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