From 2022, Masan implements its "Point of Life" strategy by piloting and then rolling out retail innovations nationwide, thereby strengthening the infrastructure for growing consumers, including new retail models, membership programs, digital payments and logistics platforms to provide goods to consumers in the most timely and cost-effective manner.
2024: Clear results from the Point of Life strategy
Currently, WinCommerce (WCM, a member company of Masan, the operator of the WinMart/WinMart+/WiN chain) owns a network of nearly 3,700 points of sale in 62 provinces and cities across the country. This is the largest modern retailer in Vietnam with more than 50% of the modern retail market share. Each month, this supermarket chain serves more than 30 million shoppers.
Since acquiring WCM, Masan has made great strides in improving its EBITDA margin from negative 7% in 2019 to positive 2% in 2023. This change is thanks to a series of initiatives including network rationalization retail network, strengthening partnerships with suppliers, improving operations, introducing new store models.
WCM has deployed additional WiN and WinMart+ Rural store models, specializing in serving customers in urban and rural areas, respectively. WiN store model focuses on "Premium freshness!" with many products and services to serve customers in urban areas, while the WinMart + Rural store model focuses on FMCG products with attractive prices to serve rural customers. In the second quarter of 2024, these two store models achieved revenue growth per store of 6.3% and 10.7%, respectively, compared to 5.2% for traditional stores. This growth shows that the strategy of changing the store model is bringing significant business efficiency to WCM.
Along with that, Supra - the internal supply chain of this retail system is also continuously improved through logistics initiatives such as: integrating technology, collecting data and applying artificial intelligence to operations. Predict demand for goods, reduce inventory holding time, and optimize logistics costs. Supra has assumed 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 reducing costs for each product, bringing benefits for customers.
One of the biggest key tasks to improve profits is that WCM has changed its industry strategy. This strategy helps WCM improve gross profit by 10 percentage points, while still having a very good price compared to competitors in the market. WCM fell 6 percentage points in its Price Index. WCM's prices are currently completely competitive with the main major competitors in the market, including supermarkets as well as mini supermarkets.
In particular, the important connection "chain" of the consumer - retail platform applying technology to serve customers has achieved impressive results. After one year of launch, WCM's WiN Membership program has now reached 10 million members. The customer acquisition cost of this program remains zero, and members' shopping cart value is doubled compared to that of non-members. On average, members shop 4 times a month. This highlights the program's success in driving customer engagement and loyalty. It can be said that WCM has the right pieces of the puzzle in place to succeed in the Vietnamese market.
Continue to focus on profitable growth goals
WCM closes 2023 with a revenue of 30,000 billion - this is a revenue level that few retailers in Vietnam can achieve. In 2024, WCM is expected to achieve revenue of 33,000 billion. In particular, the minimart chain - a key business chain accounting for 75% of revenue - has had spectacular growth after 5 years.
The WinMart/WinMart+ system is expected to continue to be profitable in the last 2 quarters of the year with the expectation that revenue will maintain a growth momentum of more than 9%. Bao Viet Securities' analysis report said, "In the first half of 2024, WCM focuses 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, show impressive efficiency, when the growth rate of LFL revenue (stores opened before 2023) of each store is higher than the average of the entire chain. These two new models even had a net profit in LFL stores in the first half of 2024.” This shows that WCM has found a model in the right direction, ready for profitable scale expansion.
In the coming time, WinCommerce focuses on profitable growth, opening an average of 1 new point of sale every day and is expected to reach 4,000 points of sale by the end of the year. In the second half of 2024, WCM continues to focus on the goal of profit after tax by accelerating LFL growth to 8-9% over the same period, while also increasing the pace of store openings to reach ~100 stores new every quarter. WCM will continue to strengthen its position in rural areas with the WinMart+ Rural model.
In July 2024, with minimart store LFL revenue growth compared to June reaching 4%, WinCommerce continued to bring in net profit for the second consecutive month, showing a significant opportunity to improve profit margins. in the upcoming third quarter and begin to contribute to Masan Group's overall profit.
