Due to the fierce competition and poor business results, the Shop & Go grocery store system decided to withdraw and "donate" its system to Vingroup.
|Vingroup will be gifted 87 Shop & Go grocery stores. Source: tienphongplus.vn |
On April 2, 2019, VinCommerce, a subsidiary of Vingroup managing the VinMart and VinMart+ retail systems, has announced the transfer of 87-unit Shop & Go grocery store chain for the symbolic value of $1.
Shop & Go operates non-stop convenience stores selling consumer goods, fast food, and drinks.
Established in 2005, Good and Life JSC (the previous owner of the Shop & Go chain) mainly operates in consumer goods retail. The first Shop & Go store opened in 2006 in Ho Chi Minh City to then grow into a system of 87 stores, including 17 in Hanoi and 70 in Ho Chi Minh City.
Explaining the $1 deal, Good and Life JSC’s representative said, “We have invested a great deal in the Shop & Go system, however, the results are not as expected. The Vietnamese retail market still has potential space to exploit, but competition is tight, therefore, we decide to retreat. In the market, Vingroup has proven its superiority in the retail sector, thus, we decided to donate Shop & Go so that Vingroup can continue its investment and development.”
According to its 2016 financial report, Shop & Go’s total revenue was VND267 billion ($11.6 million), resulting in a loss of nearly VND40 billion ($1.74 million). At the end of 2016, the accumulated losses of Shop & Go reached VND205 billion ($8.91 million), while its charter capital was only VND1.27 billion ($55,200).
By October 2018, the charter capital of Good and Life JSC increased to VND207.27 billion ($9.01 million).
After merging, the Shop & Go stores will be upgraded to meet the standards of VinMart and VinMart+ systems. The whole process is expected to be completed in April 2019.
With a system of over 2,000 points of sale (PoS), Vincommerce's system is far ahead of its peers like Saigon Co.op (about 650 PoS), Bach Hoa Xanh of Mobile World (nearly 500 PoS) or Circle K (about 300 PoS).