With 5 stores, Ereablue - the electronics retail chain of Mobile World in Indonesia - has a revenue of nearly 30 billion VND per month.
Mr. Doan Van Hieu Em - CEO of two retail chains The Gioi Di Dong and Dien May Xanh - has just announced that Erablue's business results have been continuously growing recently. With the first 5 stores, the chain's revenue initially reached 3.5 billion VND per month at each point of sale. Up to now, the above figure has increased to 6 billion VND, or about 30 billion VND for the entire chain.
Previously, at the investor meeting in mid-August, Mr. Hieu Em announced that the entire chain's semi-annual revenue reached 150 billion VND. The average monthly revenue at a store reached more than 5 billion VND, higher than the Vietnamese market. At that time, Erablue was earning profit before tax, depreciation and interest (EBITDA) at the store level.
However, this revenue is only 0.5% of its "brother" Dien May Xanh in Vietnam.
In front of a newly opened Erablue store in Indonesia. Photo: Facebook Doan Van Hieu Em
Erablue is a joint venture between Mobile World and Erafone Artha Retailindo, a subsidiary of Indonesia’s largest technology retailer. The joint venture opened its first store in Jakarta, then expanded to Tangerang, an area considered a new economic engine. The number of outlets was increased to six in September after the business model was finalized.
The Board of Directors of Mobile World once said that the potential of the Indonesian electronics market is large, 2-3 times larger than Vietnam. This company wants to have 25 more stores in the archipelago by the end of this year, half the plan at the beginning of the year. Mr. Hieu Em said that they are facing a big obstacle in finding premises. The characteristic of Indonesia is that houses are close together with small areas, to open an Erablue store, they have to rent 5-7 adjacent premises.
Improving gross profit margins is also an important goal for this electronics chain. Currently, the number of Erablue stores is still small, creating a low gross profit margin. The company's management said that expanding the number of sales points in a moderate number helps them "be more confident" in optimizing operational efficiency and increasing profit margins.
The Gioi Di Dong has identified sales and after-sales services as its strengths and "big differences" in the future, especially delivery and installation services. In Indonesia, the market follows the referral model, meaning that retailers set up TVs at a store and let customers come and watch, then they introduce customers to the company to deliver and install. Erablue, on the other hand, implements a full-service model, meaning they are the ones buying the products and doing all the after-sales services for customers.
Mr. Hieu Em said that if buying an air conditioner, Indonesian customers often wait a whole week for it to be delivered and installed. While he is confident that Erablue can do this on the same day.
A recent report by MNC Sekuritas, one of the largest securities companies in Indonesia, assessed that EraBlue has the potential to disrupt the country's electronics retail market with its unique sales concept, which is the hallmark of Ace Hardware and Electronic City - the two largest electronics retailers in Indonesia. Erablue offers a price level 5% lower than the Ace Hardware chain. In addition, the Vietnamese joint venture also has a longer product return period, 0% installment payment, free shipping and installation services. However, to date, Erablue's sales are still low compared to its competitors.
Siddhartha
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