In October 2014, Vingroup officially entered the retail market by acquiring 70% of Ocean Retail’s shares (owner of the Ocean Mart supermarket chain) and changing its name to VinMart Supermarket JSC. Vingroup also introduced two new brands, VinMart and VinMart+, wholly owned by the group. However, under Vingroup, the VinMart and VinMart+ chains were unable to generate profits and focused only on growth and expansion.
At the end of 2019, Masan took over VinCommerce (later renamed WinCommerce) from Vingroup. In the following years, Masan made changes to the WinCommerce system through three main strategies: closing unprofitable stores, improving product portfolios, and adjusting pricing policies.
In the second quarter of 2020, to form the “Point Of Life” ecosystem, combining online and offline channels to better serve consumers’ diverse needs, Masan completed the purchase of an additional 12.6% of The CrownX shares (a consolidated consumer platform – Masan Consumer Holdings and Retail – WinCommerce) for a total cash value of $862 million. After this transaction, Masan held approximately 82.6% of The CrownX’s shares and increased its economic interest in WinCommerce to 69.17%.
In June 2023, the WinCommerce retail segment officially turned a profit. The increased ownership in WinCommerce has paid off for Masan and demonstrated the company’s consistency in its strategy to focus on investing in the consumer retail business.
**Expansion Alongside Profitability**
In the second quarter of 2024, WinCommerce (WCM) recorded revenue of VND 7,844 billion, up 9.2% from the previous year. This achievement is a result of the upgrade and improvement of WiN stores (targeting urban consumers) and WinMart+ Rural stores (serving rural consumers). These two store models outperformed the traditional model, with LFL growth of 6.3% and 10.7%, respectively, in the second quarter of 2024 compared to the same period last year. It is known that the company has completed its restructuring and aims to maintain its position as Vietnam’s largest retail chain with 3,763 sales points as of the end of the second quarter of 2024. WCM plans to accelerate the pace of store openings in the second half of 2024.
Expanding the scale of operations is a goal that the company always strives for. When the company’s potential is strong enough, expansion will help increase revenue, profits, brand reputation, and more. For WCM, the equation of expanding the network while maintaining profit growth is not an easy task for any business. However, WinCommerce’s management has specific plans to make this a reality.
In April 2024, the Masan Group held its 2024 Annual General Meeting of Shareholders, where the Group’s CEO, Mr. Danny Le, shared the development plan for WinCommerce: “We have a clear plan to unlock shareholder value for WinCommerce in the medium term. As a Group, we focus not only on growth but also on increasing profits in the next 18-24 months.” Accordingly, “Network Growth” and “Member Growth” are WinCommerce’s strategic priorities.
In the second quarter of 2024, WCM recorded EBITDA of VND 172 billion, up 11.1% from the previous year. Excluding one-time profits from the pilot distribution of financial products in 2023, EBITDA increased by 33% compared to the previous year. Also, in the last quarter, the operating profit margin for retail continued to improve. This achievement was contributed by increased sales productivity and negotiations with more banking partners to leverage the extensive network of sales points across Vietnam as a distribution platform for financial products.
As of the end of June 2024, WCM operated 3,673 WCM stores, with a net addition of 40 new stores since December 2023, as management remained cautious about store openings due to the uncertain macroeconomic environment and focused on refining the store model. WCM plans to accelerate the pace of store openings in the second half of 2024.
**Continued Improvement in Profitability**
According to the company’s report, WCM’s strategic focus for the second half of 2024 is to continue focusing on improving profitability, achieving break-even in net profit by accelerating LFL growth to 8-9% year-over-year and increasing the pace of store openings to approximately 100 new stores per quarter. WCM will continue to strengthen its position in rural areas with the WinMart+ Rural model. The WiN Membership Program will be optimized to bring value to Masan’s ecosystem and partner brands.
In 2024, WCM is expected to achieve net revenue of VND 32,500 to VND 34,000 billion, an increase of 8% to 13% year-over-year, respectively. This growth is driven by faster LFL growth, network expansion, and positive performance from new stores. According to economic experts, most retailers view the end of the year as a good time to stimulate consumer demand, as this period can contribute 30-40% of annual sales. With positive results in the first half of the year and a vibrant retail trend towards the end of the year, WCM promises to achieve positive outcomes, continuing to “bring money home” to Masan.
