myNEWS Launches South Korean Convenience Store CU In Malaysia
When we covered the story of myNEWS and its founder, Dang Tai Luk, he had already announced the company’s plans to bring the famous South Korean supermarket chain CU to Malaysia.
To help you gauge the size of the CPU, they have around 15,000 stores across South Korea, according to The Edge. Today, the first CU store in Malaysia opened on the ground floor of Centrepoint Bandar Utama.
It’s the first of 30 to 50 stores they plan to open in the country in their first year, Dang confirmed with Vulcan Post. In the space of 5 years, they plan to open a total of 500 stores in the country.
Much like FamilyMart is a niche convenience store selling Japanese snacks and ready-to-eat meals, CU will be serving that, but in South Korea.
There will be ready-to-eat dishes like bingsu, corndog, tteokbokki (rice cakes), double pumpkin ice cream, Korean fried chicken, gimbap, spicy Samyang noodles, bread and pastries, and more. They also have ready-to-eat dishes that almost look like a bento-style box with rice, bulgogi beef, fish patties, and kimchi all in one set.
There is also seating for customers to dine with their ready-to-eat meals, but only a maximum of 20 customers will be allowed in the store at a time, per their current SOP guidelines.
Bringing CU to Malaysia makes sense because of the importance of South Korean culture here, whether in terms of food, music or beauty, etc.
According to The Edge, Dang said he would see higher revenue from the new stores which are expected to achieve better gross margins compared to myNEWS stores, which tend to be 30% to 40% currently.
Although their own outlets will continue to be the main contributors to the group’s revenue, Dang expects UC to contribute more in the future, once they break even in 2-3 years. .
While Dang remains positive in this regard, analysts have pointed to the potential of this strategy leading to cross-cannibalization of the myNEWS brand.
Kenanga Research analysts Wan Mustaqim Wan Ab Aziz and Nikki Thang said they were also not optimistic about the company given “general consumer sentiment moderate amid COVID-19 pandemic” .
“We are concerned that the new CU points of sale may overwhelm the already competitive value-added store space and cannibalize its existing MyNews brand. The execution risk for the expansion of a new brand still prevails, even more in the current uncertainty of the market and in addition to the existing expansion plans of the Maru Café group ”, explained Wan Mustaqim and Nikki.
But Dang isn’t discouraged, telling The Edge he doesn’t care about the over-saturation of the convenience store market and saying the Malaysian market is still young and growing with a low penetration rate.
- You can read more about CU here.
- You can read more about our previous coverage on MyNEWS here.
Featured Image Credit: Dang Tai Luk, Founder of MyNEWS
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