Baby product chain sees plummeting profit

By Tat Dat   May 26, 2023 | 04:10 pm PT
Baby product chain sees plummeting profit
A Con Cung store in HCMC. Photo by Con Cung
Con Cung JSC, Vietnam’s largest mom and baby product store chain, saw its profit plunge 95% after its two bond repayments worth a total of VND115 billion ($4.9 million) last year.

The firm earned VND4.7 billion in profit after tax in 2022, down 95% year-on-year. By the end of 2022, Con Cung’s liabilities were at VND2.445 trillion.

The company no longer has any outstanding bonds, as it fully paid it’s two bond lots that matured last year. They were worth VND115 billion at an interest rate of 11% per year.

Besides Con Cung products for mothers and babies, the company, founded in 2015, also offers children’s toys via the brand Toycity, as well as clothes with its brands CF Fashion and Con Cung Fashion.

Currently, Con Cung has over 700 stores nationwide, with 6.4 million customers registered as members. It is the largest chain in Vietnam in its segment.

It received a $90 million investment from Asian private equity fund Quadria Capital in 2022. The capital was used to expand the company’s scale and network of stores, with the goal of operating 2,000 stores nationwide by 2025.

The funding has also been used to develop an all-in-one application providing personalized products and services based on customer needs.

According to London-based market research company Euromonitor, the total revenue of products for moms and babies in Vietnam reached VND50.1 trillion in 2021. The figure is expected to grow 7.3% every year in the 2021-2025 period.

Data from U.S. market measurement firm Nielsen also shows that total revenue in this segment may reach $7 billion, a growth of 30-40%. Currently, however, 80% of the market share belongs to small retail stores.

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