As Korean-style convenience stores and cafes open one after another on the streets of Ulaanbaatar, Mongolia's capital, locals have coined the nickname "Mongtan New Town," likening the city to a new town in Gyeonggi Province. Analysts say Korean retail companies are using Mongolia both as a success story of overseas expansion and as a new testing ground.

According to the retail industry on the 18th, Korean companies are replicating in Ulaanbaatar, where Mongolia's infrastructure is concentrated, the offline retail model they previously built in Korea's domestic market.

About half of Mongolia's total population of roughly 3.5 million lives in Ulaanbaatar, giving the country a city-centered consumption structure. More than 60% of the capital's residents are under 35, a high proportion of young people, and the city shows strong openness to global culture.

Growth has been steep, with the average economic growth rate exceeding 5% over the past three years, and the food market has continued to post double-digit growth every year on the back of rising household income. Long winters and poor transportation conditions have fostered a strong consumer tendency to handle both dining and shopping in one location, a factor cited as favorable for Korean companies.

The first sector to pioneer the Mongolian market was convenience stores. BGF Retail, which operates CU, opened its 600th store on the 26th of last month, eight years after entering Mongolia in 2018, setting the first record in Korea's retail industry of surpassing 600 stores in a single overseas country. Starting with 21 stores in 2018, the number more than doubled to 56 the following year and expanded to 541 by the end of last year. GS25, which entered Mongolia in 2021, is following close behind, operating 299 stores as of last July.

The hypermarket sector is also widening its stride. E-mart, which first entered Mongolia in 2016, currently operates six stores and opened its first No Brand specialty store in Ulaanbaatar on the 10th. The store carries a total of about 5,000 items, including more than 1,100 No Brand products as well as Korean and local goods, and also introduced convenient versions of the Mongolian traditional dishes buuz and khuushuur. E-mart has set a goal of expanding No Brand specialty stores to three within this year, 15 by 2028, and 50 within 10 years over the long term.

Cafes and dining companies are also expanding actively. Tous Les Jours opened its 25th store this month in Ulaangom, a hub city in northwestern Mongolia, and the cafe brand Dessert39 will open its fourth and fifth stores in Mongolia next month in succession. TheBorn Korea, which operates five Saemaeul Sikdang outlets, also opened the first store of its Chinese food brand Hong Kong Banjeom in May.

Locally tailored services are also cited as a factor driving growth. Targeting the characteristic of Mongolia, where toilet infrastructure is weak due to the influence of nomadic culture, CU has equipped its convenience stores with modern restrooms, and as a result, it has become common to see tourists and locals lining up in front of convenience store restrooms. Some stores have even installed shower facilities and electric vehicle charging stations for long-distance travelers and drivers, allowing travelers crossing the vast steppes to use convenience stores like rest areas.

Earnings are also rising clearly. According to the National Statistics Office of Mongolia, revenue of Korean restaurant businesses in Mongolia steadily increased from 1.3141 trillion won in 2022 to 1.8437 trillion won in 2024. Wholesale and retail revenue also grew from 1.98 trillion won to 2.7887 trillion won over the same period. CU recorded a profit in Mongolia in 2024, the first among its overseas markets, and GS25's Mongolia revenue last year was 93.714 billion won, a significant increase from 4.167 billion won in 2021. No Brand's Mongolia revenue also surpassed 10 billion won last year, and Tous Les Jours' cumulative cake sales reached 1.7 million as of April this year, more than half of Mongolia's entire population.

In its "2026 Mongolia Market Entry Strategy" report published last December, KOTRA cited the fact that more than 60% of Mongolia's population is under 34 and highly receptive to global culture as the background for Korean retail companies' success.

President Lee Jae-myung, who made a state visit to Mongolia on the 10th, also mentioned this trend. President Lee directly quoted the neologism used locally, saying that win-win models such as "Mongtan" should be further spread.

The industry views Mongolia as establishing itself as a miniature overseas domestic market where Korean-style distribution networks and products can be tested together, at a time when the domestic market faces store saturation and slowing consumption. Following E-mart and CU, which have established the hypermarket and convenience store models respectively, other Korean brands are expected to accelerate their entry into Mongolia by using these success cases as a stepping stone.

Published Date:2026-07-19