The Export-Import MD Team at GS25, a convenience store chain run by South Korean retail giant GS Retail, normally travels overseas once a month. Previously, Japan accounted for 90% of their overseas trips because benchmarking products sold in Japan, the ‘kingdom of convenience stores,’ worked well in Korea. However, this year, they have visited Japan only once and have no plans to return in the second half of the year.
This change comes amid assessments that Korean convenience stores, known as ‘K-convenience stores,’ have surpassed their Japanese counterparts. Unlike Japan, where the number of convenience stores is declining, Korea is experiencing growth in stores and sales. Notably, some Japanese convenience stores now look to Korean companies for inspiration. Korea’s convenience stores are aggressively expanding into overseas markets, sparking a “Korea-Japan convenience store war” in Southeast Asia, a region traditionally dominated by Japanese convenience stores.
Convenience stores originated in the United States, but Japan revolutionized the industry after introducing them in 1974. They eventually outpaced department store sales. Japan’s 7-Eleven even acquired its struggling American counterpart in 1991.
Korea opened its first convenience store, 7-Eleven, in 1989, fifteen years after Japan, in Songpa-gu, Seoul. It replicated successful Japanese practices such as 24-hour operations and offering onigiri (rice balls) and ATMs. Korean convenience store companies have been busy benchmarking Japanese convenience stores ever since.
However, Korean convenience store companies now declare, ‘The days of copying Japan are over.’ According to the Japan Franchise Association, the number of convenience stores in Japan has been declining monthly since June 2022, dropping from 55,887 to 55,647 in April. In contrast, Korea’s convenience stores have grown from 38,451 in 2018 to 55,580 last year.
“Instead of traveling to Japan, product planners now explore local restaurants and monitor YouTube and Instagram to quickly develop new products based on the latest trends and consumer preferences,” said a GS25 official.
The key to Korean convenience stores’ success lies in their ‘planning ability,’ enabling them to introduce new products and sales events rapidly. Korean stores offer unique products like gold bars, cars, and armchairs and frequently collaborate with other companies to create innovative products.
“We release more than 1,000 new products a year, averaging over three per day,” a GS25 representative said. “This is possible because of our unique Korean agility.”
Korean convenience stores have outpaced Japanese ones in innovation, benefiting from Korea’s advanced IT infrastructure. They quickly adopted delivery services and mobile apps, areas where Japan lagged. While many Japanese convenience stores do not offer in-store food, café-style convenience stores are emerging in Japan.
Beyond the competitive local market, Korean convenience stores are expanding globally. GS25 has opened 562 stores in Vietnam and Mongolia, while CU has launched 543 stores in Mongolia, Malaysia, and Kazakhstan. E-Mart 24, a late entrant, operates 52 stores in Malaysia and plans to open its first in Cambodia this month.
