Masan chairman defends VinMart purchase

By Dat Nguyen   March 30, 2021 | 10:42 pm PT
Masan chairman defends VinMart purchase
Watermelons are seen in a VinMart supermarket in Hanoi. Photo by Shutterstock/Vietnam Stock Images.
Chairman Nguyen Dang Quang has explained the purchase of Vingroup’s loss making retail business as a “necessary step back” to build a future pivot for the Masan Group.

The decision to purchase Vingroup’s subsidiary VinCommerce, which operates the VinMart grocery chain, had been met with opposition, even from investors who had trusted most in Masan, he said.

Quang acknowledged in the 2020 annual report released recently that investors had the right to be concerned as Masan acquired a loss of over $100 million via VinCommerce. The group also lacks first-hand experience in the retail business, he added.

However, the acquisition, announced January last year, is part of a plan to build a strong foundation for the future when modern retail companies will dominate and make substantial profits, he said.

The group has shut down over 700 underperforming VinMart+ stores and restructured the business with a focus on meeting customers’ demand, a move that helped VinCommerce break even at the end of last year.

Masan, which now operates over 2,300 VinMart outlets nationwide, is planning to build a retail ecosystem that can reach 30-50 million consumers in the next five years with a total of 30,000 stores.

Its retail business could earn revenues of $7-10 billion a year with double-digit profit growth attained by 2025.

The group’s final goal is to create a "one-stop shop" platform to meet all customers’ demand in finance, education, entertainment and healthcare, with both online and offline channels.

Masan, which also has interests in mining, food and meat production, is hoping to double its post-tax profits to VND2.5 trillion ($108.3 million) this year.

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