From 2022, Masan will implement its "Point of Life" strategy by piloting and then rolling out retail innovations nationwide, thereby strengthening the infrastructure for growing consumers, including new retail models, membership programs, digital payments and logistics platforms to deliver goods to consumers in the most timely and cost-effective way.
2024: Clear results from Point of Life strategy
Currently, WinCommerce (WCM, a member company of Masan, the operator of the WinMart/WinMart+/WiN chain) owns a network of nearly 3,700 points of sale in 62 provinces and cities nationwide. This is the largest modern retailer in Vietnam with more than 50% of the modern retail market share. Each month, this supermarket chain serves more than 30 million shoppers.
Since acquiring WCM, Masan has made great strides in improving its EBITDA margin from negative 7% in 2019 to positive 2% in 2023. This change is thanks to a series of initiatives including rationalizing the retail network, strengthening partnerships with suppliers, improving operations, and introducing new store formats.
WCM has also launched the WiN and WinMart+ Rural store models, respectively specializing in serving urban and rural customers. The WiN store model focuses on "Premium Freshness!" with a variety of products and services to serve customers in urban areas, while the WinMart+ Rural store model focuses on FMCG products with attractive prices to serve rural customers. In the second quarter of 2024, these two store models achieved revenue growth per store of 6.3% and 10.7%, respectively, compared to 5.2% of traditional stores. This growth shows that the strategy of changing store models is bringing significant business efficiency to WCM.
Along with that, Supra - the internal supply chain of this retail system is also continuously improved through logistics initiatives such as: integrating technology, collecting data and applying artificial intelligence to predicting demand for goods, reducing inventory storage time, and optimizing logistics costs. Supra has undertaken the distribution of 50% of WCM's goods in 2023, reducing logistics costs per WCM product by 11% compared to the same period last year, contributing directly to reducing the cost of each product, bringing benefits to customers.
One of the biggest key tasks to improve profits is that WCM has changed its product strategy. This strategy has helped WCM improve its gross profit by 10 percentage points, while still achieving a very good price index compared to its competitors in the market. WCM has reduced its Price Index by 6 percentage points. WCM's prices are now completely competitive with major competitors in the market, including supermarkets and mini-supermarkets.
In particular, the important “link” connecting the consumer - retail platform applying technology to serve customers has achieved impressive results. After one year of launching, WCM's WiN Membership program has now reached 10 million members. The customer acquisition cost of this program is still 0, the value of members' shopping baskets is double that of non-members. On average, members shop 4 times/month. This emphasizes the success of the program in promoting customer interaction and loyalty. It can be said that WCM has the right piece of the puzzle to succeed in the Vietnamese market.
Continue to focus on profitable growth
WCM closed 2023 with a revenue of 30,000 billion - a revenue level that few retailers in Vietnam have achieved. In 2024, WCM is expected to reach a revenue of 33,000 billion. Notably, the minimart chain - a key business chain that accounts for 75% of revenue - has had spectacular growth after 5 years.
The WinMart/WinMart+ system is expected to continue to be profitable in the last two quarters of the year with revenue growth expected to maintain a growth rate of more than 9%. Bao Viet Securities' analysis report said, "In the first half of 2024, WCM will focus more on converting existing WinMart+ stores to WIN in urban areas and WinMart+ Rural in rural areas. These two new store models, especially WinMart+ Rural, have shown impressive results, as the growth rate of LFL revenue (stores opened before 2023) per store is higher than the average of the entire chain. In fact, these two new models have made net profits at LFL stores in the first half of 2024." This shows that WCM has found the right model, ready for profitable expansion.
In the coming time, WinCommerce will focus on profitable growth, opening an average of 1 new point of sale per day and is expected to reach 4,000 points of sale by the end of the year. In the second half of 2024, WCM will continue to focus on the goal of after-tax profit by accelerating LFL growth to 8-9% YoY, while accelerating store openings to reach ~100 new stores per quarter. WCM will continue to strengthen its position in rural areas with the WinMart+ Rural model.
In July 2024, with minimart LFL revenue growth compared to June reaching 4%, WinCommerce continued to bring in net profit for the second consecutive month, showing the opportunity to significantly improve profit margins in the upcoming third quarter and begin to contribute to Masan Group's overall profit.
Source: https://laodong.vn/kinh-doanh/chien-luoc-point-of-life-nen-tang-de-wincommerce-tiep-tuc-tang-truong-1385582.ldo
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