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Top 10 retail companies in Vietnam (2021 update)

Top 10 retail companies in Vietnam (2021 update)

Thursday 09, 09 2021
The list of 10 largest retail companies in Vietnam in 2021 is prepared by VietnamCredit based on both financial and non-financial indicators.

Topping the list is Mobile World Investment Joint Stock Company (MWG). With more than 4,500 stores nationwide, this is the largest retailer in Vietnam in terms of revenue and profit. MWG is the owner of the retail chains thegioididong.com, Dien May Xanh and Bach Hoa Xanh.

top 10 Retail

Coming bottom are retailers in the airport retail sector whose revenue in previous years could reach trillions of dong. The Covid-19 pandemic has severely affected aviation activities in general and related services in particular, leading to a huge reduction in the revenue of these companies and changing their positions in the rankings of top retailers in Vietnam.

The retail chain Bach Hoa Xanh of MWG and WinMart/WinMart+ of Masan Group have benefited greatly when Ho Chi Minh City temporarily closed its traditional markets and the people's demand for hoarding goods increased sharply.

At the end of May, Bach Hoa Xanh had 1,851 stores across the country, the majority of which are located in the southern region, with about 30% of stores in Ho Chi Minh City. Similarly, the retail chain WinMart/WinMart+ also recorded a positive signal in June, the peak time of the 4th outbreak in Ho Chi Minh City.

Vincommerce has reached break-even point in earnings before interest and taxes (EBIT). This is driven by the demand for shopping through modern retail channels during the pandemic, especially for essential products. Total commercial profit margin of the company reached 20%, which is expected to increase to 30% this year thanks to negotiating terms with suppliers, sharing revenue from Phuc Long kiosks and building brand portfolio.

Since May, after spending 15 million USD for 20% of shares in Phuc Long, Masan Group has launched Phuc Long kiosk model at Winmart/Winmart+ points of sale. This cooperation strategy aims to increase customer traffic as well as help to increase WinMart+'s profit margin by 4% compared to the current level. By the end of June, there had been 50 kiosks in operation. Masan Group plans to increase the figure to 1,100 kiosks by the end of the year, accounting for 40% of the number of WinMart+ stores.

MWG

Meanwhile, MWG's financial report for the first 5 months of the year recorded May revenue of 11,380 billion VND, the highest monthly level with a net profit of 481 billion VND, up 10% and 26%, respectively, compared to the same period last year.

For the first 5 months of the year, MWG achieved net revenue of 51,830 billion VND, up 9% over the same period last year. Its profit after tax increased by 26% to 2,172 billion VND. As of the end of May, MWG had 4,532 stores. In particular, 1,851 Bach Hoa Xanh stores brought in 10,600 billion VND, an increase of more than 36% over the same period last year. Accordingly, this chain has contributed about one fifth of the total revenue for MWG.

According to MWG, the average revenue per store in May reached more than 1.35 billion VND, partly due to the strong increase in people's need to stock up on essential goods before the social distancing period. Thanks to the sudden increase in revenue in May, MWG said that Bach Hoa Xanh is approaching the breakeven level of EBITDA.

Besides essential products, sales of ICT products also increased sharply during pandemic, thereby supporting the growth prospects FPT Retail.

Although the growth focus of FPT retail is on the Long Chau drugstore chain, in the laptop retail segment, the FPT Shop chain has climbed to the top position in laptop retail market with 31% market share in the first 5 months of this year. Last year, the revenue of FPT Shop chain decreased by 16% to 13,475 billion VND.

At the 2021 annual shareholder meeting, Ms. Nguyen Bach Diep, the company's chairwoman, said that in 2021, FPT Retail would continue to focus on exploiting the laptop business. Accordingly, the revenue plan of the ICT segment accounts for about 85% of the consolidated revenue plan of 16,400 billion VND. As employees and students have to work and study from home, therefore, the demand for technology products such as phones, laptops, and tablets is very high.

Retail is expected to recover quickly after the 4th outbreak

Data from the General Statistics Office showed that in the first half of the year, the total retail sales of goods and services in Vietnam decreased by 6.6% compared to the same period last year. However, the second quarter's data still showed a positive growth of 5.1% over the same period.

During the previous outbreaks, Vietnam still maintained a high Consumer Confidence index, reaching 117 points and ranking 2nd in the region, following the Philippines. After the first wave of Covid-19, the unemployment rate continuously decreased for the next 3 quarters until the end of the first quarter, showing the potential for recovery of the Vietnamese economy.

Benefit

Following are four major trends that retailers will benefit from after the pandemic is under control:

  • Large retailers continue to seize opportunities to gain market share;
  • Consumers will maintain their habits of shopping on the Internet;
  • The growth of the smart home device market creates opportunities for distributors and retailers;
  • Commercial property developers benefit from the appearance of international brands.

However, retailers may still face many challenges including rising food prices, which will affect profit margins.

Alice Hoang Thao - VietnamCredit

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