Online revenue suddenly plunges at MWG

MWG has experienced a cave-in in online revenue in the second quarter

According to data published by MWG, in the first six months, the company's online revenue reached VND7.72 trillion ($335.65 million), up 39 per cent compared to the same period last year and accounting for 15 per cent of its total revenue.

However, this growth is uneven. In the first quarter, online revenue grew by 67 per cent, but in the second quarter, it was only 13 per cent.

Notably, in this May and June, MWG's online revenue suddenly plunged below VND1 trillion ($43.48 million).

The online revenue of MWG from January 2018 to June 2019 ($ million)

The report of Viet Capital Securities (VCSC) stated that the reason for the decline in the online segment of MWG was that since this May, the company has cut promotions (for example, discount vouchers) on the online channel to unify its online and offline prices.

According to MWG, the adjustment of its online pricing policy has not affected the company's total sales so far as customers who used to buy products online for a cheap price can now access the same products at the same price directly at the stores, too.

Correspondingly, data from iPrice shows that visitor count at the thegioididong.com website has dropped sharply in the second quarter to 25.3 million, which is only two-thirds of the figures measured at the end of 2017.

In the first half of 2019, the thegioididong.com chain closed 21 stores, mainly due to being merged into Dien May Xanh. As the mobile phone market is growing saturated, MWG's revenue from the segment reached VND17.3 trillion ($751.17 million), down 4 per cent over the same period.

A dienthoaiSIEURE.com store. Source: trithuctre.vn

Additionally, on August 8, Mobile World will launch its new store brand selling "super-cheap phones" under the domain name is dienthoaisieure.com. The new chain of mobile phone stores will follow a cost-cutting strategy and will aim to draw in residents living around the stores. This will be a direct competitor to small mobile phone shops through its marketing and management strategy and scale.

The store will provide the same mobile phone models but at a cost nearly 10 per cent cheaper than thegioididong.com and only sell models in the price range below VND8 million ($350).

Each store will have only two counsellors and is not equipped with reception chairs nor Wi-Fi or even a security guard for parking vehicles.

In 2006-2007, a similar chain was opened, called Nettra under Network Trading & Investment International Co., Ltd. However, after about two years of operation, the chain disappeared, making dienthoaiSIEURE.com a questionable course of action for MWG.