Mixed fortunes for major retail names in first quarter

May 10, 2023 | 09:00
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Some electronics names in Vietnam have taken a hit in early 2023, but companies in other retail segments have crafted the right strategies thus far for the challenges they face.
Mixed fortunes for major retail names in first quarter
Mixed fortunes for major retail names in first quarter, Source aeon.vn

According to Q1 financial reports for Mobile World and FPT, two of the biggest names in electronics retail in Vietnam, revenues and profits have plummeted.

Mobile World’s revenue reached over $1.1 billion, down 28 per cent over the same period last year. Although sales and administrative expenses were reduced by 19 per cent after cutting up to 4 per cent of staff, equivalent to 7,000 employees, the company’s profit after tax still decreased by nearly 99 per cent to just over $913,000.

In 2023, Mobile World set a revenue target of $5.8 million, up 1 per cent compared to the previous year, and profit after tax is expected to reach $182.6 million, up 2 per cent. But the company has only completed 0.5 per cent of the annual profit plan.

In the first three months of the year, FPT Retail also lost more than $217,000. According to a representative, the revenues of the FPTShop chain decreased by 20 per cent due to the continuous introduction of many discount policies to stimulate demand for electronic products in the face of competitive pressure and reduced consumption demand.

However, the pharmaceutical retail segment was strong for FPT Retail with a revenue growth of 52 per cent over the same period.

According to this year’s development plan, FPT Retail will be more cautious in expanding the store system. The company will proactively come up with policies and promotions to accompany customers in the context of high inflation, thereby leading to lower expected gross profit margin than last year.

“FPT Retail will improve gross profit by opening and selling household goods in the chain, increasing from 300 FPTShop stores selling household appliances to 600 stores by the end of 2023,” a company representative said.

FPT Retail also aims to open at least 400 more pharmacies this year, develop new services, and apply technology and digital transformation to enhance the customer experience.

Elsewhere, AEON Vietnam and Masan’s WinCommerce retail chain seem to be bright spots in the retail sector. AEON Vietnam recorded effective operations in the first quarter, with a stable growth of about 5 per cent compared to last year. In 2022, it also grew by more than 30 per cent compared to 2021.

“We have made careful preparations to bring new experiences and welcome customers back,” stated general director of AEON Vietnam Furusawa Yasuyuki. “AEON has researched and developed its own brands of fashion, interior products, home appliances, established specialised sales areas, and improved sales space. However, shopping malls and supermarkets still account for 90 per cent of AEON Vietnam’s total revenue.”

Yasuyuki expects AEON’s business results this year to be the same or higher than last year. He demanded that one of the goals of the year is that newly opened supermarkets must be successful.

“Last year, AEON made many refinements and repairs, and this year we need to maintain and develop our own brands, and unrealised plans in e-commerce. These activities must all be implemented according to the schedule to create a foundation for growth,” said Yasuyuki.

Meanwhile, the revenue of the WinCommerce retail platform increased by 0.5 per cent, reaching $1.1 billion. The increase in the number of stores and customers has helped it offset the decrease in the shopping carts. The company opened 55 more WinMart+ and one WinMart store in the first quarter, bringing the total to just over 3,440 convenience stores and supermarkets nationwide.

WinCommerce CEO Nguyen Thi Phuong said that the company will pursue the supermarket and minimart models because of possessing full advantages such as convenience, solving people’s concerns about food hygiene and safety, and thoroughly different customer experience. In 2023, WinCommerce aims to open 800 new stores and build corresponding models for urban and rural areas.

“We focus on the quality of goods, providing a great experience for consumers such as developing personalised services and convenience. Besides that, the membership scheme and competitive pricing policy are factors that will help us achieve the expected sales,” Phuong added.

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