How WinCommerce “modernizes” Vietnamese retail

The retail arm of Masan Group, WinCommerce, currently owns the "New Commerce" retail consumption model with a unique advantage in the market: an internal production, distribution platform and logistics department. After being "acquired" by Masan, the WinCommerce chain has been profitable after 10 years of operation.

According to Eurominitor, the penetration of modern retail (MT) in Vietnam is still relatively low and is currently in the early stages of development with a modest proportion of ~12% of the retail market share. Compared to the "land of thousands of islands" Indonesia, Vietnam is currently at the stage of 2010 of this country when the penetration of MT was ~12%. However, thanks to the "giants" of Indonesian retail, Indomaret and Alfamart, accelerating the expansion of their chain of stores, helping to accelerate the modernization of the retail market of Indonesia's MT. Accordingly, the MT market in the "land of thousands of islands" has achieved a growth rate of 18% per year within 5 years.

In Vietnam, although MT and E-commerce have achieved strong growth, daily consumer shopping transactions are expected to still largely take place in the traditional retail channel (General trade or GT) with a proportion of ~75 to 80% of the retail market share in the next 5 years. Monitor's report indicates that if Vietnam's MT market develops like Indonesia, the market size is forecast to more than triple in the next decade, reaching a market size of ~20 billion USD.

So which businesses have the financial capacity, retail platform and operational capacity to build “New Commerce” in Vietnam will hold the opportunity to serve 100 million Vietnamese consumers like Reliance Retail did in India and Indomaret, Alfamart modernized Indonesian retail.

WinCommerce Modernizes Vietnamese Retail

Present in 62 provinces and cities nationwide, WinCommerce (WCM, the company operating the WinMart/WinMart+/WiN chain) owns a network of nearly 3,700 points of sale. This is the largest modern retailer in Vietnam with more than 50% of the modern retail market share. Each month, the WinMart/WinMart+/WiN chain serves more than 30 million shoppers.

Modern WIN store with a wide variety of products displayed based on a large database

In 2023, WinCommerce completed its restructuring and returned to its retail chain expansion strategy; focusing on separate models for each region and customer segment. By the end of 2024, WinCommerce's expansion plan is expected to reach a total of about 4,000 stores nationwide; meaning that a new point of sale will appear every day. This is also how Indomaret and Alfamart "modernized" Indonesian retail and were successful.

However, scaling up is only one part of WinCommerce's "New Commerce" picture, as the company also combines core competencies from the retail consumer ecosystem of Masan Group (WinCommerce's parent company).

Specifically, WinCommerce combines the manufacturing capacity and strong branding capabilities of Masan Consumer (the owner of brands with billion-dollar revenues such as CHIN-SU, Omachi). Moreover, Masan Consumer also operates one of the largest food and beverage distribution networks in Vietnam. This brings significant competitive advantages such as the ability to provide goods to consumers efficiently while reducing transportation costs. This is important because nearly 70% of Vietnam's population currently lives in rural areas and the retail industry still relies heavily on traditional sales channels.

The above combination is further completed by WinCommerce's internal logistics department, Supra. Established in 2022, Supra currently owns a distribution center system consisting of 10 warehouse clusters (including dry and cold storage) across all three regions of the country. Supra is responsible for delivering 60% of WinCommerce's total output. According to WinCommerce's statistics, Supra has helped reduce 11% of logistics costs for goods, directly contributing to reducing the cost of each product, bringing benefits to customers.

Supra Cold Storage

The above means that WinCommerce's "New Commerce" model is a complete retail consumer value chain from production, distribution and logistics, contributing to "modernizing" the Vietnamese retail market.

Optimize, expand and profit

Business expansion is a goal that businesses always aim for. When the business potential is strong enough, expansion will help the business increase revenue, profit, brand reputation and many other factors. The solution to the problem of profitable expansion has been implemented by WinCommerce and has "reaped sweet fruit" in 2024.

WinMart brings consumers a rich and quality source of food products.

According to a recent report, in the second quarter of 2024, WCM recorded revenue of VND 7,844 billion, up 9.2% over the same period last year. This is the result of upgrading and improving WiN stores (aimed at consumers in urban areas) and WinMart + Rural (serving consumers in rural areas). These two store models have achieved outstanding efficiency compared to the traditional model with LFL growth of 6.3% and 10.7% respectively in the second quarter of 2024 compared to the same period. Notably, WCM achieved positive after-tax profit in June, marking a significant step forward since being acquired by Masan. WCM is expected to accelerate the pace of store openings in the second half of 2024.

WinCommerce is a solid foundation in Masan Group's journey to serve consumers. WCM's supermarket and convenience store network is an ideal destination, connecting all "all-in-one" needs from daily necessities to financial products and services of consumers. In the future, along with the development of the MT market, WinCommerce will accelerate profitability, thereby increasing the intrinsic value of the enterprise.

Source: https://baodautu.vn/cach-wincommerce-hien-dai-hoa-ban-le-viet-nam-d222823.html