Shinsegae to rebrand With Me and BGF’s CU in Iran

Date : 14 July 2017

Convenience stores in South Korea are often first to display new and innovative store concepts seen across the world. Shinsegae’s latest announcement heats-up competition in the country’s convenience channel, currently dominated by CU, GS25 and 7-Eleven.

Shinsegae rebranding their convenience stores…

In 2014, Shinsegae acquired ‘With Me’, a convenience chain network of just over 500 stores. In 3 years, they have expanded rapidly to over 2,100 stores raising their brand awareness across South Korea.

Despite battling for profitability since its launch, Shinsegae plans to invest KRW 300bn (USD$264mn) over the next three years to rebrand 'With Me' to 'Emart24', aligning its convenience business closer to Emart’s brand. The ‘24’ in 'Emart24' celebrates the 24th anniversary of Emart this year.

--- Layout redesigned but franchising system unchanged

It could take almost three times their current store network for 'Emart24' to break-even following its latest investment. But the retailer sees this as a long-term project, with store layouts also being redesigned. This will see the checkout counter moved to the centre of the store like a service desk, acting as a focal point to drive trademark and maximise sales.

However, 'Emart24' will retain is unique relationship with its franchisees, charging a membership fee instead of royalties based on sales. This allows franchisees to choose their opening hours making the prospect of franchising more appealing.

--- Private labels across formats

Shinsegae in other Emart formats are already focusing on private labels, for example their ‘No Brand’ store dedicated to their own labels. No Brand and Peacock brands will be integrated into Emart24 to boost and revitalise their brand.

BGF's CU to enter Middle-East

Last month, we covered Shinsegae’s deal with Fawaz Alhokair group to open a cosmetics store, launching its 'Sugar Cup' brand in Saudi Arabia. While Shinsegae is unlikely to launch grocery operations in the Midde-East, BGF Retail Co has gone one step further, sealing a deal to franchise CU convenience stores in Iran. The agreement allows home appliances firm, Entekhab Investment Development Group to invest and operate CU Iran outlets. 

Convenience competition heating-up

The increasing number of single and two-person households in Korea has led to retailers to rethink their store size, placement and strategy. It is surprising to see BGF look outside of Asia for their first foreign venture. Since acquiring and rebranding FamilyMart to CU in 2014, BGF has continued to invest in CU, maintaining its leading position in convenience format in Korea.   

GS25 excels in terms of sales per store and this year, their store network could overtake CU and become the largest in Korea. With 7-Eleven, also catching up rapidly, and Emart24 to be more competitive in the next few years, CU cannot afford to lose focus in its operations at home.