[비즈한국] Amid intensifying competition in the convenience store market, E-mart13948024 is drawing attention for its new trademark application. E-mart24 has seen a continued slump, including expanded losses and a shrinking number of stores in the second quarter of this year. Consequently, the industry interprets this trademark application as a potential move by E-mart24 to strengthen its private brand (PB) offerings to improve performance.
E-mart24's new trademark application: Will they launch a new PB brand?
On August 13, E-mart24 filed a trademark named ‘ye!low’ with the Korean Intellectual Property Office. The scope of the application covers a wide range of items, including health supplements, processed foods, beverages, alcoholic beverages, snacks, and fresh foods, as well as household goods, clothing, bags, stationery, and electronic products.
As E-mart24 has filed for a trademark that goes beyond beverages and processed foods to encompass household goods, clothing, cosmetics, and electronic devices, industry analysts suggest it could be a move toward building a "mega-PB" brand. The name ‘ye!low’ is interpreted as both reminiscent of E-mart24's signature color, yellow, and a combination of ‘ye!’ and ‘low,’ highly likely leading to the launch of a cost-effective PB brand that emphasizes "good prices."
Recently, E-mart24 has been accelerating the launch of its own PB brands. Earlier this year, it introduced ‘Sangsang-ui Kkeut’ (End of Imagination), a PB brand emphasizing cost-effectiveness, and in April, it planned another PB named ‘Sangsang-ui Him’ (Power of Imagination).
Lee Eun-hee, a professor of Consumer Science at Inha University, analyzed, “In an era of high inflation, consumers prioritize price competitiveness. Whether they are single-person households, young people, or the elderly—the primary consumer base for convenience stores—there is a strong tendency to prefer PB products over cheaper NB (manufacturer brand) products. This is why the industry is betting its survival on strengthening PBs.”
GS25 and CU are securing product competitiveness through their own PBs such as ‘YOUUS’ and ‘HEYROO’. 7-Eleven also operates ‘Seven Select’ to differentiate itself with premium desserts and convenience foods.
Regarding the trademark application, an E-mart24 representative explained, “(A new PB brand) is not specifically planned yet. The trademark application was filed in advance as a preemptive measure.”
Was the No Brand effect minimal? Q2 earnings fall
Since April of last year, E-mart24 has introduced E-mart's PB brand, ‘No Brand,’ products into its convenience stores. The strategy was to use a brand verified by large supermarkets as a key card for performance improvement. An E-mart24 official stated, “We are continuing to expand the number of stores carrying No Brand products. It has currently increased to the 2,000-store level.”
However, the expected effect has not materialized. Last year, E-mart24's revenue was 2.1631 trillion won, a 2.8% decrease from the previous year (2.2251 trillion won), and its operating loss expanded to 29.8 billion won (from a 23 billion won loss the previous year). Excluding a brief profit (6.8 billion won) in 2022, E-mart24 has been in the red ever since the Shinsegae Group acquired 'With Me' in 2013.
The earnings deterioration has continued this year. E-mart24's revenue for the second quarter of this year was 532.2 billion won, a 5.9% decrease compared to the same period last year (565.4 billion won). The operating loss was 4.4 billion won, an increase of 1.7 billion won compared to the same period last year (2.7 billion won).
The aforementioned official stated, “This is due to the continued recession in the convenience store industry. Weather also had a major impact in the second quarter, such as frequent rain on weekends. We expect performance to improve from the third quarter onwards, as the effects of the government's livelihood consumption coupon policy take hold.”
The number of stores is also stagnant. The number of stores, which was 6,598 at the end of 2023, decreased to 6,130 by the end of last year. This is less than half the size of GS25 and CU, which compete for the top two spots. E-mart24 appeared to be expanding its presence by opening 26 new stores in the first quarter of this year, but it closed 23 stores again in the second quarter.
An E-mart24 official said, “We have been working on store efficiency since 2023. We are focusing on opening stores with high revenue potential,” adding, “The convenience store industry as a whole is not in a mood to aggressively expand the number of stores.”
There are concerns in the industry that E-mart24's position could become even more vulnerable as the convenience store market enters a mature stage. In the convenience store market, the number of stores is directly linked to competitiveness, and it is difficult to narrow the gap with competitors in a situation where new openings are as difficult as they are now.
Professor Lee Eun-hee analyzed, “E-mart24 has a very small number of stores compared to its competitors. In a situation where new store openings are limited, it is realistically difficult to achieve a turnaround in performance unless revenue per store is drastically increased. The key for a convenience store is how effectively it can absorb nearby consumers. For this, strengthening product planning capabilities and marketing events that make customers visit voluntarily are necessary.”