GS25's new approach in Vietnam

Stores for Gen Z

GS25 just established its 300th store, Noodle Corner, at 489-491 Dien Bien Phu in Binh Thanh District, Ho Chi Minh City, with the goal of providing a unique experience for Gen Z.

According to a GS25 representative, the opening of the 300th store is a significant milestone in the brand's development journey in Vietnam, demonstrating the chain's ongoing innovation to create new experiences for various customer segments, gradually transitioning to a modern and creative lifestyle brand.

Since late 2017, Korean retail giant GS Retail (owner of the GS25 convenience store chain) has entered the Vietnamese market through a collaboration with Son Kim Group to establish small supermarkets and convenience shops in the country. This is Korea's largest convenience store chain, with more than 30% of the country's retail market. The Vietnam-Korea joint venture officially inaugurated the first GS25 store in Ho Chi Minh City at the start of 2018, making it the brand's first location outside of Korea.

From 2022 until the present, the GS25 network has consistently developed new convenience store concepts in conjunction with big brands, giving customers with a variety of experiences. Examples include Fresh Beer stores collaborating with Heineken and Tiger Soju, as well as Korean Noodle stores partnering with the Nongshim brand.

However, they continue to innovate in terms of image by introducing an entirely new concept, the Noodle Corner, targeted at addressing the Gen Z student demographic. This store is distinguished by its contemporary design, calm and large ambiance, and almost 100 chairs on the second level.

The store also features a section dedicated to displaying a range of instant noodle products from prominent companies in Vietnam, Korea, Japan, Thailand, and Indonesia, among others. The store also has sophisticated noodle cooking machines, giving consumers a fun purchasing and learning experience.

According to the company's spokesperson, developing multiple distinctive convenience store formats is a strategy for increasing brand recognition across a wide range of client categories, particularly Generation Z. This is a crucial milestone for GS25 as it seeks to grow its chain through franchising operations. Since 2021, GS25 has commenced franchising operations in the Vietnamese market, and franchise partners have operated around 40 GS25 outlets.

Why Gen Z?

In reality, due to their convenience and cost, convenience shops in Vietnam are gaining popularity among Gen Z, a young consumer group born between 1997 and 2007, with traffic to this channel gradually increasing over time.

According to a Decision Lab poll, these young customers now account for about 60% of the convenience store customer base in Vietnam, with approximately 40 million Gen Z visiting the stores in recent quarters.

Currently, convenience shops in Vietnam not only sell packaged snacks and ready-to-drink drinks, but they also serve cooked meals at reasonable costs in air-conditioned dining rooms with free WiFi and enough seating. Furthermore, convenience store chains such as GS25, Family Mart, Circle K, and 7-Eleven are actively expanding their menus to include a variety of food options ranging from microwave-toasted bread to cooked rice, hotpots, and other local foods to appeal to Vietnamese consumers.

Previously, fast-food restaurants drew customers because of their convenience, affordability, and contemporary amenities. However, convenience stores can now accomplish all that mid-range businesses can, and sometimes better.

In recent years, the number of convenience stores in Vietnam has increased, and this trend is expected to continue, spurred by ambitious investment from both domestic and international investors. Analysts predict that convenience shops will soon become the most accessible outlet for customers of all ages, economic levels, and times of day.

In this scenario, Gen Z will remain the target client category for convenience store brands. According to some research, Gen Z are presently "huge lovers" of convenience shops. They are greatly affected by advertising and social media, particularly when it comes to buying, eating, and having fun. Furthermore, companies currently focus on the most responsive customer segment, making Gen Z buyers at convenience shops a desirable demographic.

According to market research company Mordor Intelligence, the retail industry in Vietnam is predicted to reach $276.37 billion in 2024 and $488.08 billion by 2029, with a compound annual growth rate of 12.05%.

GS25 has most likely seen the potential and vast client base in Vietnam. Its initial store intended to provide a unique experience for Generation Z. In the future, the Korean retail behemoth may expand similar locations to boost brand recognition and forge a new route in Vietnam.