The "Point of Life" strategy

WCM currently owns nearly 3,700 WinMart supermarkets, WinMart+ stores, and WinN stores nationwide. Photo: WinCommerce

Since 2022, Masan has implemented its "Point of Life" strategy by piloting and then deploying retail innovations nationwide, thereby strengthening the infrastructure for its growing consumer base, including new retail models, membership programs, digital payments, and logistics platforms to deliver goods to consumers in the most timely and cost-effective way.

Customers shopping in the Hi!Beauty area. Photo: WinCommerce

2024: The clear effectiveness of the Point of Life strategy.

Currently, WinCommerce (WCM, a subsidiary of Masan, the operator of the WinMart/WinMart+/WiN chain) owns a network of nearly 3,700 retail outlets in 62 provinces and cities nationwide. It is the largest modern retailer in Vietnam, holding over 50% of the modern retail market share. Each month, this supermarket chain serves more than 30 million shoppers.

Since acquiring WCM, Masan has made significant progress, improving its EBITDA margin from negative 7% in 2019 to positive 2% in 2023. This transformation is thanks to a series of initiatives including streamlining its retail network, strengthening partnerships with suppliers, improving operational efficiency, and introducing new store models.

WCM has expanded its store model to include WiN and WinMart+ Rural, respectively, specializing in serving urban and rural customers. The WiN store model focuses on "Premium Freshness!" with a wide range of products and services for urban customers, while the WinMart+ Rural store model focuses on attractively priced FMCG products to cater to rural customers. In Q2 2024, these two store models achieved revenue growth of 6.3% and 10.7% per store, compared to 5.2% for traditional stores. This growth demonstrates that the shift in store model strategy is yielding significant business results for WCM.

Furthermore, Supra – the retail system's internal supply chain – has continuously improved through logistics initiatives such as: integrating technology, collecting data, and applying artificial intelligence to predict product demand, reducing inventory holding time, and optimizing logistics costs. Supra handled the distribution of 50% of WCM's goods in 2023, reducing logistics costs per WCM product by 11% compared to the same period last year, directly contributing to lower product prices and benefiting customers.

Supra cold storage. Photo: WinCommerce

One of the biggest priorities in improving profitability was WCM's shift in product category strategy. This strategy helped WCM improve its gross profit margin by 10 percentage points while maintaining a very competitive price index compared to its competitors. WCM reduced its price index by 6 percentage points. WCM's prices are now fully competitive with major competitors in the market, including supermarkets and mini-supermarkets.

In particular, the crucial connecting link of the consumer-retail platform, utilizing technology to serve customers, has achieved impressive results. After one year since its launch, WCM's WiN Membership program has reached 10 million members. The program's customer acquisition costs remain zero, while the value of members' shopping carts doubles compared to non-members. On average, members shop four times per month. This underscores the program's success in fostering customer interaction and loyalty. It can be said that WCM has found the right piece to succeed in the Vietnamese market.

Continue to focus on profitable growth targets.

WCM closed 2023 with revenue of 30 trillion VND – a figure few retailers in Vietnam have achieved. In 2024, WCM projects revenue of 33 trillion VND. Notably, the minimart chain – the core business segment accounting for 75% of revenue – has experienced spectacular growth over the past five years.

Customers shop at a WinCommerce store. Photo: WinCommerce

The WinMart/WinMart+ system is expected to continue to be profitable in the last two quarters of the year, with revenue growth projected to exceed 9%. A report by Bao Viet Securities stated, “In the first half of 2024, WCM focused more on converting existing WinMart+ stores to WIN in urban areas and WinMart+ Rural in rural areas. These two new store models, especially WinMart+ Rural, have shown impressive results, with revenue growth rates for LFL stores (stores opened before 2023) exceeding the chain average. Furthermore, these two new models have already achieved net profit in their LFL stores in the first half of 2024.” This indicates that WCM has found the right model and is ready for profitable expansion.

Essential goods are available at incredibly good prices at WinMart. Photo: WinCommerce

In the coming period, WinCommerce focuses on profitable growth, opening an average of one new store per day and aiming to reach 4,000 stores by the end of the year. In the second half of 2024, WCM will continue to focus on achieving after-tax profitability by accelerating LFL growth to 8-9% year-on-year, while also increasing store openings to reach approximately 100 new stores per quarter. WCM will continue to strengthen its position in rural areas with the WinMart+ Rural model.

In July 2024, with a 4% increase in LFL (Local Fulfillment Revenue) from minimart stores compared to June, WinCommerce continued to generate net profit for the second consecutive month, indicating significant opportunities to improve profit margins in the upcoming third quarter and begin contributing to Masan Group's overall profits.

Source: https://laodong.vn/kinh-doanh/chien-luoc-point-of-life-nen-tang-de-wincommerce-tiep-tuc-tang-truong-1385582.ldo