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Branching out to new areas a key strategy: Mobile World

By Phuong Dong   February 23, 2022 | 03:00 am PT
Branching out to new areas a key strategy: Mobile World
An employee speaks to a customer at an AVACycle shop, a retail chain of Mobile World. Photo courtesy of Mobile World
Expanding into new areas such as retailing of drugs, fashion items and jewelry is risky, but Mobile World’s said it is part of its strategy to learn through experience.

Its chairman, Nguyen Duc Tai, told shareholders at a recent meeting that these risks are manageable since the main business of selling smartphones and electronics has matured.

He was addressing shareholders’ concerns that the company is spreading itself too thin by having a finger in many pies, which could impact its earnings.

On January 10 MWG, the country’s biggest electronics retailer, launched five new retail chains: AVAFashion, AVAKids (mom and baby care), AVAJI Sports, AVAJI (watches and jewelry).

It already had drugstore chain An Khang and grocery chain Bach Hoa Xanh.

"Mobile World and Dien May Xanh are now mature adults who are can go to the city by themselves to look for growth opportunities, and whatever their parents do at home will have a minimal impact", Tai said, referring to the company’s two main products, smartphones and electronics.

Last year sales rose by 9 percent to nearly VND95 trillion ($4.15 billion) despite the major disruptions caused by Covid-19.

The company targets VND140 trillion this year.

Some shareholders said at the meeting that the more lines of business a company has the more chaos it faces, and it might lose market share in existing businesses.

But Tai was unconcerned: "Cash has never been a problem".

Mobile World had assets of nearly VND63 trillion last month, 37 percent up year-on-year and nearly half of it in cash, bank deposits and short-term bonds, he said.

Trying out new ideas is how the company could learn, and it would pull the plug on unprofitable businesses, he added.

 
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