When we covered the history of myNEWS and its founder, Dang Tai Luk, he’d already announced the company’s plans to bring the popular South Korean convenience mart chain, CU, to Malaysia.
To help you gauge how big CU is, they have about 15,000 stores all over South Korea, according to The Edge. Today, the first CU store in Malaysia was launched on the ground floor of Centrepoint Bandar Utama.
This is the first of the 30-50 stores they plan to open in the country within their first year, Dang confirmed with Vulcan Post. In the span of 5 years, they plan to open a total of 500 stores in the country.
Like how FamilyMart is a niche convenience store selling Japanese snacks and ready-to-eat meals, CU will be serving that, but South Korean.
There will be some ready-to-eat food like bingsu, corndog, tteokbokki (rice cakes), pumpkin double soft serve ice cream, Korean fried chicken, gimbap, Samyang spicy noodles, bread and pastries, and more. They also have ready-to-eat meals that are almost like a bento-style box with rice, bulgogi beef, fish cakes, and kimchi in one set.
There are also seating places for customers to dine-in with their ready-to-eat meals, but only a maximum of 20 customers will be allowed in the store at any one time as per their current SOP guidelines.
Bringing CU into Malaysia makes sense because of how prominent South Korean culture has become here, be it in terms of their food, music, or beauty, etc.
According to The Edge, Dang shared that they’ll be seeing a higher revenue thanks to the new stores that are expected to achieve better gross margins compared to the myNEWS stores, whose margins tend to be 30% to 40% currently.
Although their own outlets will continue to be the group’s main earnings contributors, Dang expects to see CU contributing more in the future, once they break even in 2-3 years’ time.
While Dang remains positive on that end, analysts have pointed out the potential of this strategy leading to cross-cannibalisation of the myNEWS brand.
Kenanga Research analysts Wan Mustaqim Wan Ab Aziz and Nikki Thang have said that they’re also not optimistic about the venture given the “overall subdued consumer sentiment amid the COVID-19 pandemic”.
“We are concerned over the possibility that the new CU outlets will overcrowd the already competitive consumer value store space and cross-cannibalise its existing MyNews brand. The execution risk for the expansion of a new brand still prevails, even more so during the current market uncertainty and on top of the group’s existing Maru Café expansion plans,” Wan Mustaqim and Nikki explained.
But Dang remains undeterred, telling The Edge that he was unconcerned about oversaturation in the convenience store market and stating that the market in Malaysia is still young and growing with a low penetration rate.
Featured Image Credit: Dang Tai Luk, founder of MyNEWS
