With generous funding from parent group Shinsegae and backing from its top chief, E-Mart 24 (formerly WithMe), is making fast proliferation and posing threat to traditional convenient store leaders.

In terms of the number of outlets, E-Mart 24 is expected to elbow out Ministop, the industry’s fourth, within this month.

E-Mart 24 fast narrowed its gap with the rival by upping its franchisees from 1,765 stores last year to 2,330 at the end of last August, closer to Ministop’s 2,420 stores. The number of E-Mart 24 shops grew sharply especially after Shinsegae Group laid out a massive investment plan with a re-branding project for its convenience store line in July. It injected 60 billion won ($53 million) for expansion with the proceeds it gained from selling off its remaining stake in U.S. big-box store Costco’s operation in Korea earlier this month.

“From the pace of growth - 90 additions each month - the number of E-Mart 24 shops would surpass 2,430 by late September or early October,” according to E-Mart 24 on Tuesday. The company’s internal target is 2,700 by the end of this year.

Ministop is still safe in its rank in terms of revenue. E-Mart 24 posted 378.4 billion won in sales last year, while Ministop reported 1.17 trillion won from Mar. 1, 2016 to Feb 8, 2017. Ministop is estimated to remain ahead of E-Mart 24 this year despite a fast increase in the number of E-Mart 24 shops.

Ministop has maintained a top spot in top-line performance per shop for many years thanks to its focus on productivity. It introduced a new franchise policy late last year to permit new openings to stores that exceed 100 square meters. Ministop stores grew incrementally from 2,200 in 2015 to 2,346 in 2016, a much slower rate than that of rivals.

But industry watchers claim it won’t be long before E-Mart 24 begins to reap profit from the economies of scale. The Shinsegae convenient store is more of a smaller concept of the household discount store E-Mart with most of its in-house brands available as underscored by the rebranding of the store. Three Starfield COEX shops saw their sales and daily customer visits up 18 percent and 6 percent, respectively, in the past month after stores bore E-mart label.

By Sohn Il-seon and Park Eun-jin

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]