Applying technology, Masan solves difficult problems of the retail consumer market

The $350 billion “cake”

According to the Ministry of Industry and Trade , Vietnam's retail industry currently has a market size of 142 billion USD, forecast to increase to 350 billion USD by 2025, contributing 59% of the total domestic budget GDP.

However, the retail industry still lacks close links between parties in the supply chain of goods (manufacturers, distributors, transporters, consumers), especially for essential food products, so the market is susceptible to fluctuations due to the impact of consumer psychology.

Mr. Danny Le - General Director of Masan Group shares about Masan's successful model. Photo: Masan Group

Therefore, retail businesses need to make changes in line with market trends to easily approach and create value for consumers. In particular, digital transformation, the application of AI (Artificial Intelligence) and ML (Machine Learning) technology is one of the prerequisites for retail consumer businesses to take market share of this 350 billion USD "pie".

As a leading enterprise in the modern consumer retail industry with the largest scale system, Masan has promoted digital transformation to turn its enterprise into a consumer - technology group since 2021, and accelerated its breakthrough from 2022 to present.

Technology consumer platform solves difficult market problems

Mr. Rahul Bhandari, Chief Technology Officer of Masan Group, shares about AI applications in the group. Photo: Masan Group

According to a recent report by JP Morgan, Vietnam is one of the most attractive retail consumption growth stories in the Asia region.

With more than 27 years of experience in the consumer sector, Masan clearly understands the challenges of the market. At the event “Application of AI, ML and data science in consumption - retail”, this enterprise clearly pointed out the difficulties throughout the consumer value chain.

WinCommerce promotes the distribution of diverse goods at affordable prices. Photo: Masan Group

First, for brands, products, and services: The first and most important challenge is the lack of data to serve the purposes of innovation and increase value for business users.

For example, when changing product packaging, businesses need data such as color, packaging material, patterns, etc. that consumers prefer in order to come up with the optimal solution.

In addition, high purchasing costs are also one of the major challenges for businesses. Businesses can control these costs by creating a purchasing list based on data on market demand for the products they are selling.

Last but not least is the risk of losing sales due to shortages at the point of sale. This is the result of businesses not having a reasonable inventory plan at the point of consumption.

Staff of Masan's Supra logistics company check the status of the automatic sorting system. Photo: Masan Group

Second, for retailers: Unreasonable inventory is one of the problems many businesses face. Tracking the flow of goods and inventory of different sales channels is also a big challenge in the operations of retailers.

Besides, to increase sales, businesses often implement marketing programs and these activities can affect profits if businesses use marketing costs unreasonably.

Third, for customers: Customers will have to pay higher prices for products and services if businesses cannot optimize operating costs.

Customer experience is also one of the issues of concern as the trend of personalization is growing. To gain consumer trust and increase sales conversion rates, businesses need to understand them by introducing products that are truly suitable for individual customers thanks to data such as purchase history.

Fresh seafood counter with open preparation space, displaying a variety of premium quality products from WinCommerce. Photo: Masan Group

Providing solutions to the above challenges, Mr. Danny Le, CEO of Masan Group, clearly outlined Masan's strategy for building the Point of Life (POL) network. Accordingly, the POL consumer-technology ecosystem is an offline-to-online ecosystem consisting of three main elements: Products and services provided by Masan; a commercial infrastructure connecting all partners in the ecosystem; and thirdly, a technology platform, capable of analyzing data through AI and ML, as well as a combination of Masan's people and organizations.

Masan’s POL ecosystem will solve many important problems, optimizing business operations across the entire consumer value chain. Specifically, integrating more than 3,600 stores and supermarkets in the WinCommerce chain into the Supra logistics system will create a nationwide platform, helping to reduce costs and increase access to consumers.

Currently, Supra owns a distribution center system consisting of 10 warehouse clusters (including dry and cold storage) in all three regions. Supra is responsible for delivering 60% of WinCommerce's total output. This unit is also applying AI technology in the stages of ordering, delivery, sorting and sorting goods at the warehouse, centrally controlling product quality at the warehouse and ensuring the quality and quantity of goods transported to the system are consistent and cost-optimized.

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