The latest change of the Guardian retail chain: popularizing the brand and building a multi-channel shopping environment to maintain its position as the number 1 health and beauty care chain in Vietnam.
Located on the first floor of SC Vivocity shopping mall in Ho Chi Minh City, the Guardian store specializing in beauty and health care products stands out with its orange and white main color identity. This new version of the store Tornado+ (tornado) was introduced by Guardian in Vietnam since April 2021 and is being opened to many other areas in Ho Chi Minh City.
“There must be enough space for customers to learn about, choose products or receive advice right at the store,” explained Ms. Le Huynh Phuong Thuc, CEO of Guardian Vietnam. To better suit Vietnamese consumers’ tastes, the new Guardian Tornado+ model opens up a more spacious space, modern equipment, products arranged by industry and separate areas (hot zones) to help buyers easily search for products by brand or origin.
Guardian opened its first store in Vietnam in 2011, and in 2017 the chain reached 50 stores and doubled in 2019, but the business model still has a strong traditional retail imprint. Ms. Thuc took on the responsibility in June 2019 and began the transformation journey, establishing multi-channel shopping associated with the strong shift of customers between offline-online and omnichannel integration.
The pressure to transform is even more urgent as Ms. Thuc leads Guardian during the pandemic. “At each of those touchpoints, we must be present 360 degrees in the lives of customers to continue to be No. 1 in Vietnam,” Ms. Thuc said.
Guardian distributes about 10,000 product units from more than 500 global brands and private labels such as Guardian, Botaneco Garden, Kusabana, Happy Mask... Products are divided into three main categories: beauty; personal care and health care. On average, stores with an area of 120-150m2 have 7,000-8,000 items from about 300 suppliers. Currently, the entire chain of 105 retail stores operates in parallel with online stores on Shopee, Lazada, website and app, and fast delivery channel via GrabMart.
It took them two years of investment in systems and people to build this ecosystem. “Everything is connected, making customers understand the new model. In order for them to order anytime, anywhere and have it delivered, the logistics of delivery must also be set up smoothly throughout the whole process,” said Ms. Thuc. The number of Guardian stores has remained almost the same for two years while the way the chain is opened is being repositioned.
According to Ms. Thuc, when online channels were not strong, they opened quickly and everywhere, but now "there is no reason to expand widely if it is not effective." Beauty and health care products have the characteristics that customers must have direct contact points, learn about and test the products, so the coverage problem is being designed more reasonably, focusing on certainty and effectiveness.
When first entering Vietnam, Guardian was positioned as a middle-class brand, but in recent years they have moved closer to the mass market. Ms. Thuc analyzed that compared to ten years ago, the new generation of customers has increased income, more abundant life, higher awareness of health and beauty, so they are ready for a lifestyle of self-care.
Mr. Alain Cany (center) — Chairman of Jardine Matheson Vietnam Group and Chairman of Eurocham Vietnam, witnessed the signing ceremony of cooperation between Guardian Vietnam and Saigonchildren for the charity project #Guardiancares, on August 23 in Ho Chi Minh City.
Guardian’s largest customer groups are commuters or housewives living around the store’s location, young students, especially men – a large consumer group that not many stores serve. Ms. Thuc analyzed: “Sticking to the ‘trust and proximity’ point is an important factor that helps us balance when deciding to popularize the store chain for the next step of development.”
Guardian’s “mass strategy” has recently been linked to brands and suppliers forming “price stabilisation” programmes. At least 300 items are promoted throughout the campaigns, each campaign lasting at least three months and with no change in discount.
Guardian is a brand of DFI Retail Group (formerly Dairy Farm) - one of Asia's leading retailers and a member of the giant multi-industry group Jardine Matheson with many large and familiar projects in Vietnam. Worldwide, DFI and its joint ventures operate more than 10,200 stores with approximately 230,000 employees, with total revenue exceeding 27 billion USD by the end of 2021.
The health and beauty retail chain alone is present in 11 markets with more than 2,000 stores. The Guardian brand has nearly half a century of history, starting in Malaysia and expanding to Southeast Asia, while the Mannings brand leads in markets such as Hong Kong, Macau, and mainland China.
Guardian is considered DFI's success in the Vietnamese market compared to many other retail brands belonging to this group. In 2007, DFI's Wellcome supermarket chain entered Vietnam but withdrew from the market in 2012. Giant, a hypermarket brand, also entered Vietnam at the same time as Guardian in 2011, but in 2018 it was transferred to the French group Auchan Retail and withdrew from the market.
On average, private labels account for 10–15% of Guardian stores, with a reasonable product structure that gives customers more choices but still balances with the product system of partners. According to Ms. Thuc, the scale in Vietnam is now large enough for them to work with stable brands and suppliers in the long term, with a more diverse product range and be able to enter more specific product lines.
With a global chain scale, diversified and focused private label programs, they benefit from importing products with consistent quality, goods in any high-end or low-end segment meet international standards before reaching the store.
In other markets, Guardian chain has been operating for decades, the healthcare segment is dominant because the pharmacy is located inside the store, with doctors and pharmacists providing advice. In Vietnam, the beauty industry accounts for 60% of sales. In the healthcare industry, due to the unique model of not placing a pharmacy in the store, Guardian emphasizes the wellness segment. Ms. Thuc explained: "In Vietnam, the operations of drug stores are quite unique and have a relatively wide coverage, there is no reason for us to put a pharmacy in to compete."
Market movements, especially rapidly changing customer behavior during the pandemic, have helped Guardian quickly move to an omnichannel business environment. “With a growth rate of more than 30% per year, it would take 2-3 years for us to double our sales, but with the online channel, which has only been promoted since 2019, the growth rate must be calculated in multiples, on average 2-3 times higher than the previous year,” said Ms. Thuc.
Guardian Vietnam is considered a 'regional star' because they came through the pandemic 'safer and healthier than before'. Sharing with Forbes Vietnam via email, Mr. Soren Lauridsen, CEO of DFI's health and beauty care division in Southeast Asia, said that he is "optimistic about the growth prospects in the Vietnamese market and that Guardian Vietnam is the driving force for the whole group."
Although Guardian is the largest health and beauty retail chain in the market, it is not the first name to appear. Medicare was the earliest brand, born in 2001, and was the only chain in Vietnam in this field for 10 years before Guardian appeared.
Ms. Le Huynh Phuong Thuc, CEO of Guardian Vietnam. Photo: Danny Bach
In 2017, Guardian rose to the top of the market and has since been consistent with its strategy of opening a chain targeting purchasing power in major cities, with 80% of stores located in Ho Chi Minh City, the rest in Hanoi and several other cities including Vung Tau, Can Tho, Da Nang and Bien Hoa. While Medicare's strategy is to spread across localities, of the chain's nearly 80 stores, only about 20% are located in Ho Chi Minh City.
In the past five years, the race for health and beauty retail chains has become hotter as new players have entered the market. One of them is Aeon Wellness, a chain under the Aeon Group that has developed following in the footsteps of the hypermarkets of the retailer from the land of cherry blossoms. Aeon also opened Glam Beautique - a brand that collaborates with names such as Shiseido, Sulwhasoo, Lancome, Laneige, Astalift... providing accompanying services such as makeup corners, consultation, care and health check-ups.
Another Japanese pharmaceutical and cosmetic retail chain, Matsumoto Kiyoshi, also officially entered Vietnam in 2020, during the pandemic, and has so far developed three stores in Ho Chi Minh City.
Guardian’s direct and formidable competitor is another name also from Hong Kong – Watsons, a beauty and health care brand of the ASWatson group that operates more than 7,200 stores in 12 markets. Notably, as soon as it entered Vietnam in 2019, Watsons immediately implemented the O+O model (online and offline).
From the first model store at Bitexco introducing the shopping and beauty experience, the brand now has eight stores in Ho Chi Minh City and Can Tho. Another brand, Sociolla from Indonesia, also entered the market at the end of 2020. Despite the impact of the pandemic, Indonesia's leading beauty e-commerce platform also provides a shopping system with 13 stores.
“There are friends in business and there are partners in business, the more crowded the more competition, promoting the market to become larger and more professional,” Ms. Thuc stated her opinion. “The market size that Guardian is operating in is currently about 5.5 billion USD with an average growth rate of 11-12% per year – a potential market with many opportunities.”
The leader of Guardian Vietnam refused to reveal the upcoming business plan but said that it will expand its coverage both online and offline and that “the market is large enough to open dozens of stores each year for many years to come”. The parent company’s vision for Guardian Vietnam is an annual growth rate that is double the market average, because Vietnam in their global chain is an emerging market, growing faster than neighboring markets where Guardian has been operating for decades.
Ms. Thuc graduated from the University of Economics, Ho Chi Minh City in 1997, then continued her master's degree in business, working for many multinational corporations before leading Guardian Vietnam. "Luckily, I joined Unilever right after graduating, as one of the first batch, so I was thoroughly trained along with youthful enthusiasm and many ambitions." After ten years with Unilever Vietnam, going through many positions from marketing, sales to product line director, Ms. Thuc learned a lot of business knowledge and accumulated experience that has greatly helped her current role at Guardian.
Leaving Unilever, Ms. Thuc joined Castrol at the time when Castrol and BP merged, so they needed someone with a background in FMCG to rewrite their business strategy. Ms. Thuc took on the role of marketing director, staying there for four years, and then moved to L'Oreal Vietnam to take on the role of consumer goods director for six years.
Sharing about the human resources strategy in the Vietnamese market, Mr. Soren Lauridsen said that after a long time of Guardian being operated by foreign executives, they realized that it was time to incorporate local factors into the business strategy. “The implementation process (appointing Ms. Thuc) showed a wise choice,” he told Forbes Vietnam .
“Moving from the role of a brander to retail – a dynamic and exciting market, the opportunity for innovation in this process is vast. For me, this is also an industry that creates as many jobs as the manufacturing industry, if we can create value here, it will help society a lot,” said Ms. Thuc.
Forbes.vn
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