The "sweet fruits" of 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 compared to the same period last year, reaching over VND 8,600 billion. For the first nine months of the year, this modern retail chain achieved revenue of approximately VND 24,404 billion, an increase of nearly 9% compared to 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 a net profit after tax. This is a clear indication of a sustainable profit-making path in the future.
Total retail sales of goods for the first 11 months of 2024
Looking back four years ago, when Masan acquired WinCommerce, WinCommerce's EBITDA (earnings before interest, taxes, and depreciation) was -7%. However, in just a few years, WinCommerce's EBITDA has reached the break-even point and is at 4% this year. Thus, the EBITDA has changed by 11% in just four years. At an event earlier this year, WinCommerce's leadership stated that they had completed the phase of finding a profitable retail model. “We are ready to enter a new chapter – an era of revenue and profit growth,” said a WinCommerce representative. Not only has WinCommerce (WCM) begun to realize this goal with a net profit of VND 20 billion in Q3, but it is also aggressively expanding its system. As of September 2024, WCM operates 3,733 outlets, with an additional 60 new stores added since Q2 2024. By the end of 2024, this retailer expects to have a total of approximately 4,000 outlets nationwide.The "campaign" to modernize retail infrastructure.
Accounting for 75% of the chain's total revenue, the mini-supermarket model of this retailer is the key driver of the system's overall business results. Specifically, the WiN store model targets urban consumers, while WinMart Rural targets rural customers. New store models like WiN (urban areas) and WinMart Rural (rural areas) achieved year-on-year growth rates of 12.5% and 11.5% in Q3 2024, respectively. The traditional store model also grew by 8%. This model has also helped WinCommerce penetrate rural areas, establishing a presence in 62 out of 63 provinces and cities nationwide. WinCommerce estimates that rural areas, with 65 million inhabitants, have a retail market size of approximately $50 billion. Masan's leadership stated that the mini-supermarket model is the most suitable business model for essential goods in the Vietnamese market. The large number of personal motorbikes in Vietnam and the habit of people going to the market daily to buy fresh produce are the reasons WinCommerce is promoting these retail models.
The MEATDeli meat counter offers a wide variety of meats at WinMart supermarket.
“Because Vietnamese people don't yet have enough cars to drive to supermarkets or hypermarkets to pick up their groceries, and convenience stores don't offer enough fresh produce to attract daily shoppers, minimarts offering both fresh produce and FMCG are crucial. Therefore, minimarts, which stock both fresh produce and FMCG, are very important, providing convenience to consumers with daily shopping habits,” a Masan representative stated. According to Euromonitor data, the penetration of modern trade (MT) in Vietnam is still relatively low and is currently in its early stages of development, with a modest market share of nearly 12%. Compared to Indonesia, Vietnam is currently at the same level as Indonesia in 2010, when MT penetration was also around 12%. However, thanks to the expansion of Indonesian retail giants Indomaret and Alfamart, the modernization of the MT market in Indonesia is accelerating. Accordingly, the MT market in Indonesia has achieved an 18% annual growth rate over the past five years. In Vietnam, although MT and e-commerce have experienced strong growth, daily consumer shopping transactions are expected to largely remain in traditional retail channels (General Trade or GT), accounting for nearly 75 to 80% of the retail market share in the next five years. A Euromonitor report indicates that if Vietnam's MT market develops like Indonesia's, its size is projected to more than triple in the next decade, reaching nearly $20 billion.
Bountiful harvests of vegetables and fruits are currently being collected and are planned for export to international markets in the near future.
Therefore, businesses with the financial capacity, retail infrastructure, and operational capabilities to build a new retail model will seize the opportunity to serve 100 million Vietnamese consumers, as Reliance Retail has done in India and Indomaret, and Alfamart has modernized retail in Indonesia. In the Vietnamese market, owning an internal logistics system applying Supra technology, combined with Masan Consumer's (a subsidiary of Masan) strong brand building capabilities, production, and extensive distribution channels, the retail chain (WinCommerce) is a crucial link helping Masan realize its digitalization of retail infrastructure. Looking towards the end of 2024, WinCommerce aims to achieve positive after-tax profit, boost LFL growth, and accelerate store openings to reach approximately 100 new stores per quarter. WCM will continue to strengthen its position in rural areas with the proven success of the WinMart Rural model. Simultaneously, 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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