IFC eyes $20M investment in convenience store chain GS25

IFC conducted a review of the proposed investment in February and March 2022 by visiting five stores and a warehouse in Thu Duc City, the global lender said in a disclosure.

The funds would go to expand the presence of local operator GS25, a subsidiary of Vietnam’s Son Kim Retail and South Korea’s GS Retail in which Son Kim owns a 70% stake.

The chain’s full expansion plan is set to cost a total of VND1.056 trillion ($46 million), which includes the costs of construction, equipment, tools, supplies and store rental deposits.

GS25 was launched in Vietnam in 2017. It is based on the GS25 convenience store concept from South Korea, which was introduced to Vietnam by JV partners GS Retail Co. Ltd.

Typical GS25 store formats include about 150-square-meters of shop space, including an area for dine-in seating. The stores offer fresh food and fresh groceries as well as ready-to-eat and ready-to-cook products. The chain prominently features Korean-made goods.

By early November, the retailer had 200 stores in Ho Chi Minh City and neighboring localities.

Its expansion plan was announced amid a post-pandemic recovery in retail and domestic consumption.

Total 2022 retail and services revenue have surged 20.5% year-on-year to VND5,180 trillion in the first 11 months, according to the General Statistics Office. The figure is nearly 15% higher than 2019 – before the Covid-19 pandemic.

Vietnam was home to 674,000 convenience stores and minimarts by the end of May, GSO said.

GS25 is facing strong competition from other retail chains. Circle K has 413 outlets here, while FamilyMart boasts 150 and Ministop has launched 136.