How major retail players WinCommerce, Bach Hoa Xanh navigate Vietnam market

By Tat Dat   May 13, 2024 | 11:50 pm PT
The country’s two biggest retailers of consumer goods, WinCommerce and Bach Hoa Xanh, have differing growth strategies.

The former is seeking to expand nationwide and increase its membership rate, while the latter focuses on fresh foods and the southern region.

WinCommerce, a subsidiary of conglomerate Masan Group that operates Winmart stores, and Bach Hoa Xanh, a subsidiary of electronics retail giant Mobile World, both recently restructured and are now racing to grab a bigger share of Vietnam’s US$350 billion retail market, according to Vietcombank Securities.

WinCommerce has 3,667 stores, double that of Bach Hoa Xanh’s 1,696.

WinCommerce dominates the northern and central markets, while Bach Hoa Xanh prioritizes the south and has a small number of stores in the Central Highlands and none in the north.

Among the key strategies of WinCommerce is developing its logistics system Supra, a platform that manages 16 storage centers and distributes 60% of its goods, helping bring down costs.

The company recently made improvements to it, which helped increase its gross profit margin by 2 percentage points in the first quarter.

People shop in a Winmart outlet. Photo courtesy of Masan

People shop in a Winmart outlet. Photo courtesy of Masan

Another focus of WinCommerce is giving discounts to its members to encourage their return.

Bach Hoa Xanh managed to exceed WinCommerce’s revenues by 5% last year.

It offers daily discounts on fresh foods that will expire soon to reduce disposal.

It targets to bring logistics costs down from 4.5% of sales to 3.5% by the end of this year.

Masan CEO Danny Le told investors recently that Bach Hoa Xanh had competitive strategies in terms of fresh foods, and that WinCommerce would develop its own plans in response though that does not mean it would compete directly with Bach Hoa Xanh in this segment.

MWG leaders have said they are "not too concerned about competitors" and instead focus on giving what customers need, especially in terms of affordability.

Bach Hoa Xanh plans to open 100 new outlets this year, mostly in HCMC.

An employee arranges goods at an outlet of Bach Hoa Xanh. Photo courtesy of Mobile World

An employee arranges goods at an outlet of Bach Hoa Xanh. Photo courtesy of Mobile World

WinCommerce plans to open 400-700, taking its network to over 4,000.

The company also wants to develop other types of stores besides the traditional Winmart supermarkets and Winmart+ grocery stores.

One new brand it is developing is WIN, which comprises large outlets that sell medicines, food and beverage, Techcombank financial services, and Reddi telecommunications services.

Without the addition of a major new competitor, WinComerce and Bach Hoa Xanh would be the two main retailers in Vietnam, same as Walmart and Costco in the U.S. and Alfamart and Indomaret in Indonesia, Danny Le said.

"There will be enough space for both WinCommerce and Bach Hoa Xanh in the growing retail market."

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