According to data from Eurominitor, the penetration level of modern retail in Vietnam is still relatively low and is currently in the early stages of development with a modest proportion of about 12% of the retail market share. If compared with Indonesia, Vietnam is currently in the country's 2010 period when modern retail penetration was about 12%. However, thanks to the "giants" of Indonesian retail, Indomaret and Alfamart, accelerating the expansion of their store chains, helping to accelerate retail modernization of Indonesia's modern retail market. Accordingly, the modern retail market in Indonesia has achieved a growth rate of 18% per year within 5 years.
In Vietnam, despite strong growth in modern retail and E-commerce, daily consumer shopping transactions are expected to largely take place in traditional retail channels with 75 to 80% retail market share in the next 5 years. Monitor's report points out that, if Vietnam's modern retail market develops like Indonesia's, the market size is forecast to more than triple in the next decade, reaching a market size of about 20 billion USD. .
So any business that has the financial capacity, retail platform and operational capacity to build "New Commerce" in Vietnam will hold the opportunity to serve 100 million Vietnamese consumers like Reliance Retail did in Vietnam. India and Indomaret, Alfamart has modernized Indonesian retail.
WinCommerce modernizes Vietnamese retail
Present in 62 provinces and cities across the country, WinCommerce (WCM, the company operating the WinMart/WinMart+/WiN chain) owns a network of nearly 3,700 points of sale. This is the largest modern retailer in Vietnam with more than 50% of the modern retail market share. Each month, the WinMart/WinMart+/WiN chain serves more than 30 million shoppers.
In 2023, WinCommerce has completed restructuring and returned to the strategy of expanding retail chain locations; Focus on separate models for each region and customer segment. By the end of 2024, WinCommerce's scale expansion plan is expected to reach a total of about 4,000 stores nationwide; This means that every day a new point of sale will appear. This is also the way that Indomaret and Alfamart "modernized" Indonesian retail and succeeded.
However, scale expansion is only a part of WinCommerce's "New Commerce" picture, because this business also combines core competencies from the retail consumer ecosystem of Masan Group (Masan Group). parent company of WinCommerce). WinCommerce combines the production capacity and strong brand building capabilities of Masan Consumer (Owner of brands with trillions in revenue such as CHIN-SU, Omachi).
Furthermore, Masan Consumer also operates one of the largest food and beverage distribution networks in Vietnam. This provides significant competitive advantages such as the ability to deliver goods to consumers efficiently while reducing transportation costs. This is very important because nearly 70% of Vietnam's population currently lives in rural areas and the retail industry still depends mainly on traditional sales channels.
The above combination is further completed by WinCommerce's internal logistics department, Supra. Established in 2022, Supra currently owns a distribution center system including 10 warehouse clusters (including dry storage and cold storage) in all three regions of the country. Supra is responsible for delivering 60% of WinCommerce's total goods output. According to WinCommerce statistics, Supra has helped reduce logistics costs for goods by 11%, directly contributing to reducing costs for each product, bringing benefits to customers.
The above means that WinCommerce's "New Commerce" model is a complete retail consumer value chain from production, distribution and logistics, contributing to "modernization" of the Vietnamese retail market.
Optimize, expand and bring profit
Expanding business scale is a goal that businesses always aim for. When a business's potential is strong enough, expanding its scale will help the business increase revenue, profits, brand reputation and many other factors. The solution to the problem of profitable expansion has been implemented by WinCommerce and has "picked sweet fruits" in 2024.
According to a recent report, in the second quarter of 2024, WCM recorded revenue of 7,844 billion VND, an increase of 9.2% over the same period last year. This is the result of upgrading and improving WiN stores (targeting consumers in urban areas) and WinMart+ Rural (serving consumers in rural areas). These two store models outperform traditional models with LFL growth of 6.3% and 10.7% respectively in the second quarter of 2024 over the same period. Notably, WCM achieved positive net profit in June, marking a significant progress since being owned by Masan. WCM is expected to accelerate the pace of store openings in the second half of 2024.
WinCommerce is a solid foundation in Masan Group's journey of serving consumers. WCM's network of supermarkets and convenience stores is an ideal destination, connecting all "all in one" needs from daily necessities to products and financial services of consumers. In the future, along with the development of the modern retail market, WinCommerce will accelerate profitability, thereby helping the internal value of the business to increase.
