Park Jae-koo, chief executive of BGF Retail, fifth from left; Hong Jung-kook, vice president of BGF Retail, sixth from left; Gankhuyag Adilbish, chairman of Premium Group, fourth from left; and Ganbold Adilbish, chief executive of Premium Group, third from left, pose after forging a master franchise deal on Tuesday. [Photo provided by BGF Retail Co.]
BGF Retail Co., operator of South Korea’s largest convenience store chain CU, said on Tuesday that it struck a master franchise deal with Mongolian retailer Central Express to advance into the East Asian country where the consumer market has been rapidly developing amid growing young population.
The latest deal is the second of its kind for BGF Retail after a contract with Iranian retail firm Entekhab Investment Development Group last year.
Under the master franchise deal, BGF Retail - the franchiser - will provide brand and overall system and knowhow to local franchisee Central Express that will be responsible for investment and operations.
Central Express is the retail arm of Premium Group, exclusive supplier for Mongolia’s largest mine and wind power project. The company, which opened its first convenience store in Mongolia in 2015, said that it signed the latest deal with BGF Retail in a move to secure leading position in the country’s convenience store market based on its systematized system and 30 years of operation knowhow.
Mongolia is considered a country with high growth potential for the convenience store market as young people under age 35 make up 65 percent of total population. The popularity of Korean culture including K-pop and drama has also been growing in the country with consumers gaining favorable impression on Korean brands.
Park Jae-koo, chief executive of BGF Retail, said that consumers in Mongolia have keen interest in Korea due to the influence of hallyu, or Korean wave, and the countries shares similar culture. The company will strive to become a global convenience store operator by advancing into emerging markets with high growth potential, he said.
By Baek Sang-kyung and Lee Eun-joo
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