South Korea's CU adopts online-first strategy for China entry

CU, operated by BGF Retail with around 18,600 stores in South Korea, is taking a cautious approach to entering the Chinese market. Rather than opening physical stores, the retailer has partnered with Chinese firm Ningshing Ubay to offer a small selection of products exclusively through Alibaba Group's Tmall e-commerce platform.

The online-first strategy is designed to avoid direct competition with established players like 7-Eleven and Chinese rivals in China's crowded convenience store market. Analysts describe the model as 'online-first, private-label-driven,' allowing CU to gauge consumer interest without the risk of large upfront investment in brick-and-mortar locations.

'If consumers maintain interest, a deeper strategy can follow,' said Chen Bo, a marketing professor at Sungkyunkwan University in Seoul. The approach also allows for easy withdrawal if demand does not materialize.

German supermarket chain Aldi used a similar tactic in 2017, launching online sales of 500-600 own-brand products in China before opening its first physical store in Shanghai two years later. CU's trial, with only 11 products, is significantly smaller, reflecting its exploratory stance.

China's convenience store market, though competitive, remains underpenetrated, offering room for new entrants. CU's online test will determine whether the brand can carve a niche without the scale of its larger rivals.