How is The Gioi Dien Dong's electronics retail chain doing in Indonesia?

With 5 stores, Ereablue – the electronics retail chain of The Gioi Dien Dong in Indonesia – generates nearly 30 billion VND in revenue per month.

Mr. Doan Van Hieu Em - CEO of the two retail chains The Gioi Dien May and Dien May Xanh - recently announced that Erablue's business results have been continuously growing. With the first 5 stores, the chain initially generated 3.5 billion VND per month in revenue at each location. To date, that figure has risen to 6 billion VND, or approximately 30 billion VND for the entire chain.

Earlier, at an investor meeting in mid-August, Mr. Hieu Em announced that the entire chain's half-year revenue reached 150 billion VND. Average monthly revenue per store exceeded 5 billion VND, higher than the Vietnamese market average. At that time, Erablue was generating profit before interest, taxes, depreciation, and amortization (EBITDA) at the store level.

However, this revenue figure is only 0.5% of that of its "sibling" Dien May Xanh in Vietnam.

Front view of a newly opened Erablue store in Indonesia. Photo: Facebook Đoàn Văn Hiểu Em — Front view of a newly opened Erablue store in Indonesia. Photo: *Facebook Đoàn Văn Hiểu Em*

Erablue is a joint venture between The Gioi Dien Thoai (Mobile World) and Erafone Artha Retailindo – a subsidiary of Indonesia's largest technology retailer. The joint venture opened its first store in Jakarta, later expanding to Tangerang – an area considered a new economic engine. The number of outlets was increased to six in September after the business model was finalized.

The leadership of The Gioi Dien May (Mobile World) once believed that the Indonesian electronics market had great potential, 2-3 times larger than Vietnam. The company aims to open 25 more stores in Indonesia by the end of this year, half the initial plan. Mr. Hieu Em stated that they are facing a major obstacle in finding suitable locations. A unique characteristic of Indonesia is that houses are close together and have small floor areas; to open one Erablue store, they have to rent 5-7 adjacent spaces.

Improving gross profit margins is also a key objective for this electronics retail chain. Currently, Erablue's store count is still small, resulting in low gross profit margins. Company management says that expanding the number of stores at a moderate level will give them "more confidence" in optimizing operational efficiency and increasing profit margins.

Mobile World Group identifies sales and after-sales service as its strengths and a major differentiating factor in the future, especially delivery and installation services. In Indonesia, the market follows a referral model – where retailers set up TVs in a store for customers to view, and then refer customers to the manufacturer for delivery and installation. Erablue, on the other hand, implements a full-service model, meaning they are the buyers and handle all after-sales services for their customers.

Mr. Hieu Em said that if Indonesian customers buy an air conditioner, they usually have to wait a whole week for delivery and installation. He, however, is confident that Erablue can do this in the same day.

A recent report by MNC Sekuritas, one of Indonesia's largest securities firms, assessed EraBlue as having the potential to disrupt the country's electronics retail market with its unique sales concept, a hallmark of Ace Hardware and Electronic City – Indonesia's two largest electronics retailers. EraBlue offers prices 5% lower than Ace Hardware. In addition, the Vietnamese joint venture provides longer product return periods, 0% installment payments, and free shipping and installation services. However, to date, EraBlue's sales remain low compared to its competitor.

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