Mobile World reports surging sales, expands fresh-food business
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Mobile World says sales grew by 39 percent in the first eight months of the year to VND58.7 trillion ($2.5 billion).
Profit after tax was up 36 per cent to VND1.97 trillion ($84.34 million) year-on-year.
HCMC-based Mobile World Investment Corporation (MWG), established in 2004 as a seller of mobile phones, has since diversified into a host of other areas including foods, beverages, meat and seafood, and vegetables.
Dien May Xanh, its electronics retail arm, accounts for 55 percent of sales followed by mobile phone stores The Gioi Di Dong and then department store chain Bach Hoa Xanh.
Bach Hoa Xanh, incorporated in 2015, sells vegetables, seafood, meat and fast-moving consumer goods (FMCG). While with VND2.37 trillion ($102 million) it only accounts for 4 percent of the company’s sales, the business is growing at 251 percent.
It has 405 outlets, with the two largest being in HCMC’s Thu Duc and Binh Tan districts.
Bach Hoa Xanh plans to focus on the eastern and southern parts of HCMC and the neighboring provinces of Binh Duong, Long An, Dong Nai, and Ben Tre in future.
By the end of this year it plans to have another 95 stores. A Mobile Word spokesperson said that stores that do not do well would be shut down.
Based on the firm’s proclaimed plan of having 550 stores with average monthly revenues of VND790 million ($33,850) each by the end of this year, Ho Chi Minh City Securities Corporation (HSC) estimated Bach Hoa Xanh sales to reach VND4 trillion ($171 million) this year.
But MWG found the department store business less attractive than the two other segments, saying at 14 percent the profit margin of Bach Hoa Xanh is lower than the 17 percent for the cellphone business and 16.7 percent for the electronics business.
A major reason is fresh food is more difficult to manage than the others due to the short shelf life.
Doan Van Tieu Em recently took over as CEO of MobileWorld Joint Stock Company, the subsidiary that manages the cellphone and electronics businesses.
His predecessor, Tran Kinh Doanh, is now CEO of the department store business.
Questions & Answers
Q.What proportion of Mobile World's total sales does its electronics retail arm, Dien May Xanh, represent?
What proportion of Mobile World's total sales does its electronics retail arm, Dien May Xanh, represent?
Dien May Xanh, the electronics retail arm, accounts for 55 percent of Mobile World's total sales. This makes it the largest contributor among the company's various business segments.
Q.What is the primary reason given for Bach Hoa Xanh's lower profit margin compared to other segments?
What is the primary reason given for Bach Hoa Xanh's lower profit margin compared to other segments?
The main reason cited is that fresh food, a key offering of Bach Hoa Xanh, is more difficult to manage than other products. This is attributed to its inherently short shelf life.
Q.What are the expansion plans for the Bach Hoa Xanh department store chain for the remainder of this year?
What are the expansion plans for the Bach Hoa Xanh department store chain for the remainder of this year?
Bach Hoa Xanh plans to open another 95 stores by the end of this year, reaching a total of 550. They will focus on specific areas within HCMC and neighbouring provinces.
Q.Who is the new CEO responsible for managing Mobile World's cellphone and electronics businesses?
Who is the new CEO responsible for managing Mobile World's cellphone and electronics businesses?
Doan Van Tieu Em recently took over as CEO of MobileWorld Joint Stock Company. This subsidiary oversees the operations of both the cellphone and electronics business segments.