IFC okays $20 mln to help GS25 expand convenience store system

International Finance Corporation (IFC) has approved a $20 million investment in the GS25 convenience store system in Vietnam to fuel the chain’s expansion over the next two years.

The investment is equal to VND460 billion, the World Bank’s investment arm said in a disclosure seen on Wednesday, adding that it is in quasi-equity.

Quasi-equity is a hybrid form of finance with characteristics of both debt and equity investments. It offers non-dilutive equity risk capital that is paid back based on company performance. Quasi-equity is also known as venture debt.

IFC said its review of the investment proposal was conducted in February and March 2022, including a review of environmental, health and safety and social information provided by GS25 Vietnam (a joint venture between Vietnam’s Son Kim Group and Korean firm GS Retail), and interviews with the senior management of Son Kim and GS25.

GS25 Vietnam is based on the GS25 convenience store concept from South Korea, which was brought to Vietnam by GS Retail and Son Kim Retail, part of Ho Chi Minh City-based conglomerate Son Kim Group.

The convenience store was launched in Vietnam in 2017, with almost 190 stores in HCMC and surrounding provinces by the end of 2022. The chain’s typical store formats include about 150 square meters of dine-in seating. It also sells fresh food, fresh groceries, ready-to-eat, ready-to-cook, and Korean-made products.

GS25 Vietnam is using a leased warehouse of 5,755 square meters in Thu Duc on HCMC’s outskirts from an integrated logistics services provider, CJ Korea Express Vietnam, including warehouse storage and operations, local transportation, and delivery services. The main items handled are grocery, beverage, living goods, snacks, and health and beauty products.