[News Article] E-Mart’s No Brand success story: A Korean snack chain goes global
E-Mart’s No Brand
success story: A Korean snack chain goes global
Sun A Lee, The Korea
Economic Daily - When South Korean convenience store operator E-Mart Inc.
launched its low-budget house label No Brand in 2015, few thought it would last
long. Under its motto,
“ultra-cheap prices beyond common sense,” No Brand has since unveiled snacks,
food and daily necessities sold at even below half the usual prices found in
other convenience stores in Korea. A 110-gram bag of No
Brand potato chips, which began selling at 890 won (64 cents) in June 2015,
bears the same price tag now. Such an
ultra-low-price strategy has worked. The No Brand outlets have grown to 250,
with the number of products sold there rising to 1,500 from just nine over the
years. Having tasted
success in Korea, E-Mart, a unit of Korean retail giant Shinsegae Inc., is now
taking the business model abroad, intending to become something big like Trader
Joe’s, a US grocery chain store operator, or Europe’s Aldi, a chain of
low-budget retail stores. NO BRAND IN LAOS According to
industry sources on Friday, E-Mart will open a standalone No Brand outlet in
Laos next month. The No Brand outlet,
its first in Laos, will largely be filled with its own brand products, just
like Trader Joe's or Aldi. E-Mart aims to raise
the number of No Brand outlets to three by the end of this year and increase
this further to 70 over the next decade. In February, E-Mart
signed a master franchise agreement with Kolao Group to foray into the Laotian
market. Under the agreement,
E-Mart also plans to separately open its own stores – as many as 20 – within a
decade. Riding on the K-food
popularity in Southeast Asia, E-Mart is already selling No Brand products at
its stores in Vietnam and Mongolia. For its business in
Cambodia, E-Mart, via its affiliate E-Mart24 Inc., in December 2023 signed a
master franchise agreement with Saihan Partners, a joint venture between
Cambodia’s food and beverage conglomerate Saisons Brother Holding Co. and
Korea’s Hanlim Architecture Group. In the Philippines,
E-Mart operates 19 stores that sell No Brand products. MERIENDA TIME To appeal to the
Filipinos, who enjoy the “merienda” time, during which snacks or meals outside
the traditional staples of breakfast, lunch or dinner are served, No Brand
sells coffee and tea products in individual units instead of bunched bags. In 2023, E-Mart’s No
Brand product exports to the Philippines, Mongolia and Vietnam rose 35%, 27%
and 59%, respectively, from the previous year. “Our No Brand
product prices are even lower than K-food sold locally in those countries,”
said an E-Mart official. E-Mart’s private
label products, including those sold under Molly’s, reached 37.4 billion won
($27 million) last year, up 37% from the year prior. Industry officials
are closely watching E-Mart’s aggressive launching of its No Brand products in
overseas markets to see if the Korean retailer can replicate the success of
Costco’s Kirkland – a success story of a retailer’s house brand going global. Other Korean
hypermarket operators such as Lotte Shopping’s Lotte Mart and Shinsegae’s
Homeplus are trying to bring their house brand products overseas. Their brand
awareness, however, is highly limited, said the officials. Source: https://www.kedglobal.com/retail/newsView/ked202407260013
2024.07.29
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