Chinese Ohmee convenience stores at gas stations: A copy-and-paste model risks repeating past failures

Gas stations are moving beyond fuel sales, but a steady flow of vehicles does not guarantee a steady flow of convenience-store customers.

That is the warning from Nguyen Duy Linh, founder of retail consultancy Nâng Tầm Bán Lẻ, as Vietnam Oil and Gas Group, or Petrolimex, works with Chinese retailer Meiyijia to develop Ohmee Express convenience stores at gas stations. Linh said the model is not new. It has potential, but he does not expect it to expand explosively.

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Gas stations are shifting from fuel-selling points into service stops.

He described the shift as a way for gas stations to become service stops. A prime location that once generated revenue mainly from a product with regulated margins can also sell consumer goods and services. At the same time, high urban retail rents have made it difficult for chains to reach break-even, pushing them toward nontraditional sites.

The partnership combines different strengths. Petrolimex brings locations, traffic, coverage and brand recognition. Ohmee brings the expertise needed to operate a convenience store, including managing thousands of products, fresh goods with shelf lives measured in hours, inventory, shrinkage and cold-chain logistics. Consumers could combine two stops into one.

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It is easy to sign, but difficult to operate.

But Linh said the arrangement may be easy to sign and difficult to operate. The companies have different management cultures and performance targets, while two workforces would operate side by side at the same gas station. A foreign model cannot simply be transferred to Vietnam, he said. The format was designed for motorists, while Vietnam requires a model built around motorbike users, who carry smaller baskets but shop more frequently.

Linh pointed to at least four attempts over the past 15 years that failed to scale: PVOIL’s partnership with Circle K in Vung Tau, Petrolimex’s P-Mart in Hoai Duc, PVOIL’s PVMART trial in Soc Son and Highlands kiosks at PVOIL stations. PVOIL previously said it had to operate the model itself after strategic differences with a retail partner prevented agreement. The obstacle, Linh said, has never been capital or premises. “Traffic is not the same as customers,” he said. Someone entering a supermarket at 6 p.m. may be shopping for dinner, not looking for a milk tea. Standing beside a crowd does not mean serving that crowd.

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Traffic is not the same as customers.