Euromonitor forecasts that the size of Vietnam's modern retail market could increase to 20 billion USD in the next decade. WinCommerce - a pioneer in practicing the New Commerce model - has been reaping sustainable profits, helping to increase the intrinsic value of the business. When the term New Retail became a fever in the international market and quickly spread in Vietnam with the belief that it would create a leap in the retail industry, many businesses announced the transformation of their model to New Retail. There are many ways to understand New Retail, but the most basic is that this model puts customers at the center (customer centric) instead of products. Retailers must understand customers better, create better experiences by providing products and services that best meet their needs as well as creating the most convenient way to buy for them. Data and technology are the factors that help businesses do that. In the world's most populous retail market, India, the "big guys" here have also upgraded the "New Retail" model to a new level, "New Commerce", a business model built on a new commercial platform to serve 1.5 billion Indians by establishing offline & online sales systems in both MT channels (Supermarkets and minimarts) with GT channels and Ecommerce (JioMart, Reliance's e-commerce platform). Despite strong declarations, so far, there are not many retailers in Vietnam operating according to new models. Among them, WinCommerce (WCM) has been applying the "New Commerce" model, a model that has proven successful in the billion-people retail market of India. Holding the position of an enterprise with the largest number of points of sale, located in the consumer - retail - finance and technology ecosystem, WinCommerce has been operating with sustainable profits.
Officially achieved positive profit Masan Group Corporation (
Masan Group ) announced that WCM had positive profit after tax in June. Masan said it had upgraded and improved WiN stores (aimed at consumers in urban areas) and WinMart+ Rural (serving consumers in rural areas). These two store models have achieved outstanding efficiency compared to the traditional model. Since last year, WCM has been more cautious in opening stores and focusing on improving existing stores, while renovating stores according to the WiN model. This is one of the reasons why WCM is profitable as the operating efficiency of the stores has improved significantly.
By the end of the second quarter, WCM had 3,673 stores, opening 40 new stores. Thanks to the increase in customers coming to the store, LFL revenue (Like for Like - revenue on the basis of comparable comparison at existing stores) increased by 9.7% over the same period. In the second quarter, WCM recorded VND 7,844 billion in revenue. WCM achieved a new achievement in the context that the Vietnamese retail industry has not completely escaped the difficulties that have lasted since 2023 due to consumers tightening their spending. Data for the first 7 months of 2024 showed that the total retail sales of goods and consumer service revenue at current prices was estimated at VND 3,625.7 trillion, up 8.7% over the same period last year and up 5.2% if excluding the price factor. These figures are all lower than the increase in 2023 compared to 2022. In this situation, the Ministry of Industry and Trade recently held a meeting on the program to stimulate domestic consumption and promote domestic trade. The Ministry will urgently assess the current situation and market prospects, forecast trends and promptly propose solutions to stimulate consumption to restore and increase the growth of total retail sales of goods and revenue from social consumer services.
Despite the challenging overall context, WCM's positive net profit in June has given Masan's management confidence in its solutions and its path towards sustainable profits. According to a Euromonitor report last year, experts believe that if Vietnam's modern retail market develops like Indonesia's, it will more than triple in the next decade, reaching a size of approximately 20 billion USD.
Similarities between WCM and India's Reliance Retail Reliance Retail is India's largest retailer, ranked 53rd in the list of the world's leading retailers and ranked among the fastest growing retailers globally according to Deloitte's 2023 report. Like WCM, Reliance Retail is a typical "New Commerce" model corporation with a diverse product portfolio from food, FMCG, fashion, electronics, etc. provided with superior quality and price advantages. They do this by being deeply involved in the value chain from manufacturing, supply, sales to data ecosystem and data analytics. Thanks to a large distribution system of nearly 19,000 stores in the country of a billion people, Reliance Retail has a deep understanding of customers and market trends.
In the first quarter, Reliance Retail reported an 8.1% year-on-year growth in revenue and 10.5% growth in EBITDA. The company's leadership said the growth reflected the effectiveness of its customer-centric approach, delivering better experiences through product innovation, processes and technology-integrated platforms. Notably, the Digital Commerce and New Commerce segments continued to expand, contributing 18% to Reliance Retail's revenue. According to experts, in the modern retail market with many competitors, retailers cannot compete solely on price, promotions and promotional campaigns - which are easy to copy. Victory belongs to businesses that have economies of scale and can optimize operations by combining internal manufacturing, distribution and logistics capabilities. Although the Vietnamese market is smaller than India's, the success of Reliance Retail and the similarities with WCM open up a clear future for the position of the "giant" in the Vietnamese retail industry.
According to CafeF
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