At the 2024 General Meeting of Shareholders, Mobile World Chairman Nguyen Duc Tai said that if the AVAKids mother and baby store chain fails, the group will decide not to maintain it any longer. In addition, the group will focus on increasing quality and reducing quantity this year.
AVAKids: A turning point to finish or "shut-down"
The 2024 General Meeting of Shareholders (AGM) of Mobile World Investment Corporation (MWG, HOSE) was held this afternoon (April 13).
The content of the meeting and discussion with shareholders revolved around this year's development plan at MWG's retail chains, including: Mobile World, Bach Hoa Xanh, An Khang Pharmacy...
Chairman of Mobile World Board of Directors Nguyen Duc Tai talks with shareholders at the 2024 General Meeting of Shareholders
Notably, for the mother and baby retail chain - AVAKids, Mr. Nguyen Duc Tai affirmed that AVAKids will need to have one last spectacular step to reach the finish line, if it fails, it will decide not to keep it any longer.
AVAKids is known as a chain of stores specializing in mother and baby products, with MWG opening its first facility in early 2022. After more than 2 years, this retail chain has only appeared in the Southern region, including: Ho Chi Minh City, Dong Nai, Binh Duong, Can Tho, Binh Phuoc...
The group said that AVAKids is in a clear transition phase, which is a consistent strategy to promote AVAKids towards the goal of becoming the number 1 sales chain in Vietnam in this field.
AVAKids chain of stores focuses on developing online models to reach the finish line this year (Photo: AVAKids Website)
By the end of 2023, the AVAKids chain will have 64 stores, with revenue reaching nearly 900 billion VND, an increase of more than 80% over the same period, with average revenue per store of 1.7 billion VND.
Of which, the online channel contributed 30% of AVAKids' total revenue .
This is also the goal that MWG will focus on promoting with AVAKids in this year's plan.
Specifically, MWG will not expand market share for AVAKids, instead, the group will continue to focus on upgrading products and services, especially in the form of online shopping.
Explaining this strategy, Mr. Nguyen Duc Tai stated that it is necessary to understand the psychology of customers, because: "There is no reason to ask mothers with young children to go to the store to buy things because they have no other choice. We will create choices that will make customers wonder why they have spent so much time buying things for their children."
“ This is a huge effort for AVAKids, and if that effort fails, we will be willing to shut down the chain,” he added. “In 2024, AVAKids is facing a situation where we either reach the finish line or we realize that consumers don’t really need this online model.”
In addition, Mobile World expects to reach break-even point for AVAKids before December 31, 2024.
According to statistics from the United Nations in 2023, Vietnam currently has more than 26 million children under 18 years old (accounting for 1/4 of the population), of which more than 7 million are children under 5 years old. Thanks to that, this potential market is still attracting investors to provide mother and baby products.
However, in the current context, the global economy is in recession, causing a decline in revenue, and many retailers have to bear huge costs from expanding their premises in the previous period. The trend of online shopping is booming and the socialization of retail is developing strongly.
Focus on recovery: reduce quantity, increase quality
According to the management, the Mobile World and Bach Hoa Xanh chains achieved 10% growth in the first quarter of 2024 and will continue to increase revenue and profit this year. In the next 2-3 years, MWG will not open any more electronics stores and even close down inefficient stores. The company is entering a phase of reducing quantity and increasing quality.
As for Bach Hoa Xanh, the company plans to open more stores in the Central and Northern regions, confident of achieving 4-digit profits (billion VND) in the 2025-2027 period.
Although An Khang pharmacy chain has an average revenue of 400 million VND/store, it has not yet broken even, so it will stop its expansion plan until it reaches the capitalization point of 500 million VND/store.
Era Blue electronics chain in Indonesia with 55 stores has reached break-even point at the store level. MWG will expand the chain to 500 stores by 2027.
MWG stock price movements on the stock exchange recently (Photo: SSI iBoard)
In 2024, Mobile World aims to achieve revenue of VND 125,000 billion and after-tax profit of VND 2,400 billion (an increase of more than 14 times compared to 2023). It is estimated that in the first quarter of 2024, MWG will earn VND 31,500 billion in revenue, equivalent to 25.2% of the plan.
On the floor, MWG shares are currently priced at VND52,000/share, up about 28% over the same period last year.
Source
Comment (0)