CU's first Kazakhstan convenience store opens in Almaty
Until earlier this year, Kazakhstan, a Central Asian country 27 times the size of South Korea, had no modern convenience stores.
The country only had big marts and supermarkets where people would stop by every now and then to buy groceries and daily necessities in bulk.
BGF Retail, operator of South Korea's largest convenience store CU, opened Kazakhstan's first convenience store in the country's largest city, Almaty, in March, responding to the growing desire of Kazakhstan people to buy daily necessities closer to home at any time.
“Despite the rapid growth in demand for daily necessities shopping in neighboring regions, there was no small retail channel in the country. That's why we introduced CU,” Alina Shin, CEO of CU Central Asia (CUCA), said in a recent interview with The Korea Economic Daily.
Alina Shin, CEO of CU Central Asia (CACU), a joint venture between Kazakhstan's Thinline and South Korean retail giant BGF Retail.
Shin, 29, is a fourth-generation Korean who runs Shinline, Kazakhstan's largest ice cream manufacturer and distributor.
CUCA signed a master franchise agreement with BGF Retail earlier this year and currently operates seven CU stores in Almaty.
“Young people here are already exposed to the CU brand through K-dramas. They are showing a strong interest in K-food,” she said.
One of the fastest growing economies
Kazakhstan has one of the fastest growing economies.
Last year, the Central Asian country saw its gross domestic product grow by 5.1 percent, double the global average.
It is also a “young country” with more than half of the population being under 30 years old.
(Graphics: Yoon Dong-beom)
Shin said CU is changing the local shopping culture with the Korean business practice of being “open 24 hours a day, 365 days a year.”
“In Kazakhstan, it was common for people to go to a hypermarket or supermarket once or twice a week to bulk buy groceries and daily necessities. But since CU stores opened in Kazakhstan, people have started visiting our stores multiple times a day to enjoy a meal and shop. They buy coffee on their way to work, have kimbap and ramen for lunch, and buy daily necessities on their way home,” she said.
Changes in logistics
The CUCA chief said CU has also revolutionised the country's logistics and distribution system.
In Kazakhstan, it's common for sellers to deliver products directly to stores, she said, which resulted in many cases where stores were unable to sell their products if the sellers failed to arrive at the stores on time.
An employee at CU's first convenience store in Kazakhstan in Almaty makes tteokbokki inside the store.
Upon entering Almaty, BGF Retail has established a logistics center on a 3,000 square meter plot of land to systematically manage product supply and inventory at CU stores in Almaty.
“CU's improved service quality is improving the service level of the entire distribution industry in Kazakhstan,” Singh said.
Ready-to-eat food in store
Due to the popularity of K-culture and K-food in Kazakhstan, CU quickly gained a foothold in the country.
CU stores in Almaty sell dry foods such as instant noodles and triangular kimbap, as well as ready-to-eat meals such as tteokbokki and fried chicken.
CU's first convenience store in Kazakhstan, located in Almaty, is equipped with tables and chairs for snacks.
There are tables and chairs inside the restaurant, making it easy to dine in.
Regular convenience store items and prepared foods account for more than 30 percent of CU Kazakhstan's total sales.
“Many people visit our store to taste Korean food and buy Korean products featured in K-dramas,” Shin said.
Business outside Kazakhstan
BGF Retail aims to use Kazakhstan as a base to expand into other Central Asian countries.
CU convenience store in Almaty, Kazakhstan
“We aim to open 500 CU stores in Kazakhstan by 2029. We also plan to expand into other countries by leveraging Thinline's distribution infrastructure,” Singh said.
Thinline's extensive distribution network across Central Asia, particularly its comprehensive cold chain infrastructure, will enable efficient handling of temperature-sensitive goods and benefit the convenience store chain's operations, she said.
“Among Kazakhstan's 100 ethnic groups, Koreans, or 'Koryo-ins', are a relatively small group. As a fourth-generation Goryeo-ins, I am very proud to introduce Korean culture here and improve Kazakhstan's distribution industry through Korean convenience stores,” she said.
Email Sun-A Lee at [email protected]
This article was edited by In-Soo Nam.
