03:42 (GMT +7) - Tuesday 02/06/2020


MWG's online, grocery and electronics grow strongly in 4M

Released at: 16:17, 25/05/2019

MWG's online, grocery and electronics grow strongly in 4M

Photo: MWG

Latest report from retailer notes substantial growth in nearly all categories and indicators in first four months.

by Minh Do

The online, grocery, and electronics segments continued to boost sales growth at Vietnam’s largest retailer, the Mobile World Investment JSC (MWG), according to its latest report released on May 23.

The contribution of the online segment continued to expand, reaching 18 per cent of total revenue compared to 12 per cent in the same period last year. With a total transaction value of VND6.1 trillion ($260.9 million), the online segment posted an increase of 69 per cent year-on-year, confirming the retailer’s No.1 position in e-commerce value.

Net margin for the four months was 4.2 per cent, rising from 3.5 per cent in the first four months of 2018 and driven by improving average revenue per store and productivity enhancements at stores, distribution centers, and the logistics network, leading to a reduction in operating expenses as a percentage of revenue.

All product groups, including phones, electronics, white goods, and household appliances, recorded growth. Of these, air conditioners and fans were particularly strong, doubling year-on-year as the peak of the hot season kicked off in April. The retailer sold roughly 200,000 cooling machines in just one month; almost half of last year’s total volume.

As at the end of April, MWG operated 2,324 stores, up 58 compared to March. Dien May Xanh (DMX) added 17 new stores, resulting from both new openings and the upgrade of thegiodidong (TGDD) stores to DMX stores. It successfully transformed 83 mini-DMX stores with new layouts, to optimize revenue generation.

Bach Hoa Xanh (BHX) maintained its rapid expansion, with 43 new stores, for a total of 512 as at the end of April. Of these, it had 141 stores (27 per cent of the total) in the Mekong Delta and southern provinces, and 63 large stores (300 sq m), accounting for 12 per cent of the total. Average monthly sales per store for those opened before April 1 was approximately VND1.3 billion ($55,600).

April was a memorable month for the BHX chain, as it surpassed the milestone of 500 stores, and for the first time ever two stores recorded revenue exceeding VND4 billion ($171,100) per month. Both are located in provincial areas and conduct 1,000 to 1,200 transactions per day.

After significant effort to understand consumer behavior in second-tier cities, adjusting the product offerings from those in Ho Chi Minh City and conducting flexible purchasing approaches, reaching this milestone will be strong motivation for BHX to accelerate store openings in provincial markets.

The contribution of fresh, chilled, and frozen products in BHX’s total revenue increased to 47 per cent in the first four months, compared to 40 per cent in the same period last year. BHX sold approximately 6,900 tons of fresh produce in April, up 15 per cent month-on-month and up 38 per cent against December 2018 and January 2019.

Among modern trade channels, BHX leads in sales of domestic fruit such as watermelon (700 tons per month), bananas (500 tons), guava (300 tons), and oranges (200 tons). It also imported directly from orchards in the US, the EU, Australia, New Zealand, South Africa, Egypt, and Thailand, thereby offering a diversified range of products at the most attractive prices. As such, the imported fruit sales volume surged 300 per cent, to 30 containers a month.

BHX has continued to negotiate with remaining FMCG suppliers to increase its gross profit margin from 1 per cent to 1.5 per cent by the end of this year.

The retailer recorded net profit of VND1.4 trillion ($9.9 million) in the first four months, up 36 per cent year-on-year, on revenue of VND34.1 trillion ($1.45 billion), up 15 per cent year-on-year.

April was the second-best month of the year, with the top line increasing 31 per cent year-on-year while the bottom line was even better at 62 per cent year-on-year. The retailer fulfilled 31 per cent of revenue and 40 per cent of net profit targets for financial year 2019.

User comment (0)

Send comment