CU opens its first central Asian outlet in Kazakhstan

[Photo provided by BGF Retail Co.]

BGF Retail, the operator of convenience store chain CU, announced on Thursday that it opened its first CU store in Almaty, Kazakhstan’s largest city, on Wednesday.

BGF Retail inked a master franchise agreement with Shin-Line, a local Kazakh company, in June 2023 to form a new convenience store entity, ‘CU Central Asia.’ Under the agreement, BGF Retail grants brand usage rights, store opening permissions, and operational rights to its local partner in return for royalties.

Shin-Line, a major ice cream manufacturer holding 40 percent of the Central Asian market, expanded its business scope to include convenience store products such as ramyun and dairy items. CU Astana Square is strategically located in the heart of Almaty on Töle Bi Street, a central area with high foot traffic from young residents, university students, office workers, and government employees, and is also right across from Astana Square.

BGF Retail plans to open two more stores in Almaty later in March 2024 and aims to have 50 stores in Kazakhstan by the end of the year, with a long-term goal of more than 500 stores in the next five years. The company also envisions expanding into neighboring countries.

The South Korean company has provided extensive support to Shin-Line over the past six months, sharing expertise in logistics centers and food manufacturing facilities. BGF Retail also opened Kazakhstan’s first distribution center exclusively for retail, disrupting the local logistics paradigm where all distribution channels receive deliveries directly from manufacturers.

Kazakhstan, with a per capita purchasing power parity (PPP) exceeding $30,000 in 2022, holds the top position among Central Asian countries. The country boasts a substantial middle class, and 53 percent of the population is under 30 years old, indicating significant growth potential in the convenience store industry.

In the competitive landscape of overseas expansion among major Korean convenience store chains, CU has already entered the Mongolian and Malaysian markets, GS25 is expanding into Mongolia and Vietnam, and Emart24 is set to open its first store in Cambodia in June following its presence in Malaysia and Singapore.