Ministop South Korea is for sale, rivals compete
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South Korean retail operators Lotte and Shinsegae are competing to buy the 21-year-old local subsidiary of Japanese convenience-store operator Ministop.
Shinsegae and Lotte respectively own rival chains Emart24 and 7-Eleven and are both reportedly seeking to take full ownership of Ministop South Korea. Both companies see the deal as a means to grow their respective businesses in a market where convenience-store penetration has reached saturation point, limiting opportunities for organic network growth.
7-Eleven currently operates 9535 stores across South Korea and Emart24 3413. The Ministop network numbers just 2535.
Japan’s Aeon, which owns the Ministop brand, owns a majority 76 per cent of the South Korean business.
Daesang group owns 20 per cent and Mitsubishi the balance. Aeon has appointed Nomura Securities to find a buyer for the business as it sees little future for the convenience store brand in South Korea, a highly competitive market. Instead, Aeon is looking to Southeast Asian markets for growth, including Vietnam, Thailand and Cambodia.
Last year, Ministop South Korea sales totalled 1.18 trillion won (US$1 billion), ranking it fourth in revenue terms behind GS25, CU and 7-Eleven.
Questions & Answers
Q.Why is the current owner, Aeon, selling its Ministop South Korea business?
Why is the current owner, Aeon, selling its Ministop South Korea business?
Aeon believes there is little future for the Ministop brand in South Korea, citing the highly competitive nature of the market. It is instead focusing on growth opportunities in Southeast Asian markets like Vietnam, Thailand, and Cambodia.
Q.What is the strategic motivation for Lotte and Shinsegae to acquire Ministop South Korea?
What is the strategic motivation for Lotte and Shinsegae to acquire Ministop South Korea?
Both companies view the acquisition as a way to expand their businesses in a market that has reached convenience-store saturation. Organic network growth is limited, making this deal an attractive path to increasing their store count.
Q.What is the current market position of Ministop South Korea in terms of revenue?
What is the current market position of Ministop South Korea in terms of revenue?
Last year, Ministop South Korea's sales were 1.18 trillion won (US$1 billion). This placed it fourth in revenue terms, behind other major convenience store chains GS25, CU, and 7-Eleven.
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