"Sweet fruit" from the retail sector
According to Masan's Q3/2024 business results report, the group's WinMart / WinMart / WiN retail chain recorded a 9.1% increase in revenue over the same period last year, reaching more than VND 8,600 billion. In the first 9 months, this modern retail chain achieved revenue of about VND 24,404 billion, an increase of nearly 9% over the same period last year. For the first time since COVID-19, Q3/2024 was the first quarter that WinCommerce (the company operating the WinMart / WinMart / WiN chain) achieved net profit after tax. This is a clear sign of a path to sustainable profit in the coming time.
Total retail sales of goods 11 months 2024
Looking back 4 years ago, when Masan acquired WinCommerce, WinCommerce's EBITDA (earnings before interest, taxes, depreciation and amortization) was -7%. However, after only a few years, WinCommerce's EBITDA reached the break-even point and this year it is 4%. Thus, EBITDA has changed by 11% in just 4 years. At an event earlier this year, WinCommerce's leaders said they had completed the search for a profitable retail model. "We are ready to enter a new chapter - the era of revenue and profit growth" - WinCommerce representative said. Not only initially realizing this goal with a net profit of 20 billion VND in the 3rd quarter, WinCommerce (WCM) is also accelerating the expansion of the system. As of September 2024, WCM operates 3,733 points of sale, expanding 60 new stores since the 2nd quarter of 2024. By the end of 2024, the retailer is expected to reach a total of about 4,000 points of sale nationwide.The "campaign" to modernize retail infrastructure
Accounting for 75% of the entire chain's revenue, the mini-supermarket model of this retailer is the key driving force behind the business results of the entire system. Specifically, the WiN store model targets consumers in urban areas, while the WinMart Rural store targets customers in rural areas. In particular, new store models such as WiN (urban areas) and WinMart Rural (rural areas) achieved Q3/2024 growth rates of 12.5% and 11.5%, respectively, over the same period. The traditional store model also increased by 8%. This is also the model that helps WinCommerce "penetrate" into rural areas, present in 62/63 provinces and cities nationwide. According to WinCommerce's estimates, the rural area with 65 million people has a retail market size of about 50 billion USD. Masan's leadership said that mini-supermarkets are the most suitable essential goods business model for the characteristics of the Vietnamese market. The large number of personal motorbikes in Vietnam and people's daily shopping habits for fresh produce are the reasons WinCommerce promotes these retail models.
Rich MEATDeli meat counter at WinMart supermarket
“Because of the supermarket or hypermarket models, Vietnamese people do not have enough cars to go to and bring goods home. For the convenience store model, there are not enough fresh products for consumers to visit every day. Therefore, the mini mart model with both fresh products and FMCG items is very important, bringing convenience to consumers with daily shopping habits,” said a representative of Masan. According to data from Euromonitor, the penetration level of modern retail (Mordern trade or MT) in Vietnam is still relatively low and is currently in the early stages of development with a modest proportion of nearly 12% of the retail market share. Compared to the “land of thousands of islands” Indonesia, Vietnam is currently in the 2010 stage of this country when the penetration level of MT was nearly 12%. However, thanks to the “giants” of Indonesian retail, Indomaret and Alfamart, accelerating the expansion of store chains, helping to accelerate the modernization of retail in Indonesia's MT market. Accordingly, the MT market in the "land of thousands of islands" has achieved a growth rate of 18% per year over the past 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 nearly 75 to 80% of the retail market share in the next 5 years. Euromonitor's report indicates that if Vietnam's MT market develops like Indonesia, the market size is expected to more than triple in the next decade, reaching a market size of nearly 20 billion USD.
Bountiful vegetable and fruit crops are being harvested and are planned to be exported to international markets in the near future.
So which businesses have the financial capacity, retail platform and operational capacity to build a new retail model will hold the opportunity to serve 100 million Vietnamese consumers like Reliance Retail did in India and Indomaret, Alfamart has modernized Indonesian retail. In the Vietnamese market, owning an internal logistics system applying Supra technology, combined with the ability to build a strong brand, production and widespread distribution channel of Masan Consumer (a member company of Masan), the retail chain (WinCommerce) is a key "link" to help Masan realize the "project" of digitalizing retail infrastructure. Looking towards the end of 2024, WinCommerce aims to achieve positive profit after tax, boost LFL growth and accelerate store opening speed to reach ~100 new stores per quarter. WCM will continue to consolidate its position in rural areas with the WinMart Rural model that has proven successful. At the same time, optimize the WIN Membership program to create value for Masan's businesses and partner brands. Source: https://plo.vn/masan-2024-hai-trai-ngot-tang-toc-mo-rong-quy-mo-mang-ban-le-post826997.html
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