When the "big guys" in the retail consumer industry attract foreign capital

Mr. Michael Hung Nguyen, Deputy General Director of Masan Group Corporation, shared about the initial journey of "harvesting sweet fruits" since acquiring WinCommerce - the company operating the WinMart/WinMart+/WiN chain in a recent interview.

“At the end of 2019, when Masan decided to enter the retail market, Masan's stock price went down a lot, investors thought that Masan was investing in unrelated fields, the retail market had not yet built trust. At that time, WinCommerce's EBITDA was negative 7% and now this index is positive 4%, meaning a change of 11% within 4 years after WinCommerce was acquired by Masan. We hope that WinCommerce will achieve positive profits in the third quarter,” said Mr. Michael Hung Nguyen.

The first steps of "harvesting sweet fruits" of the Vietnamese retail giant

This “hope” is considered quite modest when Masan representative shared in a recent meeting with investors: “WinCommerce continues to bring profits in August 2024. LFL growth of the mini supermarket system reached more than 10%”. Thus, WCM has continuously brought profits in the 3 months of June, July and August 2024. This marks an important milestone in WinCommerce's retail strategy when innovations and operational optimization have brought sustainable profits.

WinCommerce (WCM), the company that owns the WinMart/ WinMart+/ WiN chain, under Masan Group, has enhanced its position in the retail industry since taking over in 2019. By the end of June 2024, WinCommerce operated nearly 3,700 supermarkets, covering 62/63 provinces and cities, and is the enterprise that owns the largest points of sale in Vietnam, accounting for 50% of the total number of modern retail supermarkets. After 10 years of operation, the chain recorded annual revenue of over a billion USD, equivalent to about 26,000 - 31,000 billion VND.

In the second quarter of 2024, WinCommerce achieved VND 7,844 billion in revenue, up 9.2% year-on-year. EBITDA (earnings before interest, taxes, depreciation and amortization) increased by 11.1% to VND 172 billion. Notably, Masan Group announced that WinCommerce had positive after-tax profit in August 2024.

Customers shopping at WinMart Royal City.

After completing its corporate restructuring, the company aims to reach 10,000 stores by 2030. This means WinCommerce needs to open an average of 1,000 stores per year to triple its current size. By 2024, WCM executives expect 80% of stores to be profitable, and the retail division is recording its first operating profit since the acquisition.

Thus, after 10 years of operation, Vietnam's leading retail chain has borne "sweet fruit", marking the beginning of a sustainable growth path in the future.

Bill Gates' charity is a shareholder of Masan Consumer.

Accordingly, Mr. Michael Hung Nguyen believes that in order to successfully carry out M&A, or increase the chances of successfully raising capital, businesses need to have a clear strategy that investors can understand and trust. He also proudly shared more about his time working at Masan: “In the 17 years I joined Masan, the group has successfully raised approximately 5 billion USD. Masan is proud to have investors such as KKR, TPG, SK group, all of whom have invested many times in Masan and aim for long-term cooperation.”

Recently, among the major investors who have poured money into Masan, there is also a familiar name, the billion-dollar fund Bill & Melinda Gates Foundation Trust. In a document seeking shareholders' opinions on additional dividends in 2023, Masan Consumer Joint Stock Company (Masan Consumer - MCH), a member company of Masan Group, revealed the list of shareholders with voting rights. Of which, the billionaire's charity fund Bill & Melinda Gates Foundation Trust is holding more than 1.04 million MCH shares, equivalent to more than 0.14%. This is the 11th largest shareholder of Masan Consumer.

It is known that, apart from Masan Consumer, the Bill & Melinda Gates Foundation Trust has never directly held shares of any Vietnamese enterprise.

In order to bring good prices to consumers, WinMart's private label products are 10-20% cheaper than products in the same segment on the market.

Along with the modern retail chain WinCommerce, Masan Consumer is the main growth pillar of Masan, currently owning 5 brands with revenue of over 2,000 billion VND, including Chin-su, Omachi, Kokomi, Nam Ngu and WakeUp 247. In the first 6 months of this year, the company achieved revenue of about 13,968 billion and profit after tax of 3,458 billion VND, up 11.6% and 13.5% respectively compared to the same period in 2023. Masan Consumer's strategic goal is to own 6 billion-dollar brands, implement the "Go Global" strategy and become the leading company in Southeast Asia in terms of revenue and profit growth thanks to the new FMCG model.

In 2024, Masan Group is expected to achieve consolidated net revenue of VND84,000 - 90,000 billion, an increase of 7-15% over the same period in 2023. Core after-tax profit before allocation to minority shareholders is expected to reach VND2,290 - 4,020 billion, an increase of more than 17% and double compared to 2023, respectively.

Source: https://baodautu.vn/khi-ong-lon-nganh-tieu-dung-ban-le-thu-hut-von-ngoai-d226879.html