Masan's approach to boost WinCommerce growth

Masan's revenue reached VND20,155 billion in the third quarter, with the consumer business contributing 85%. WCM (WinCommerce) said it would focus on improving the store model and reducing the number of new store openings to ensure profitability as it approaches the "golden period" of the consumer market at the end of the year.

WCM officials have made WinMart+ expansion plans in both urban and rural areas. The stores will be renovated to align with the new WIN (Win is all you need) model in urban areas and WinMart+ Rural in rural areas.

WinMart+'s design. Photo courtesy of Masan

In 2023, it is predicted that consumers will be more careful with their shopping spending. However, the majority of customers living and working in high-end urban areas will not hesitate to spend a lot more money on a better-quality shopping experience.

After more than 9 years of operation in the retail market with 2 supermarket and convenience store models, the WinCommerce retail chain deployed a high-end supermarket model located in prime locations of large urban areas in Hanoi and HCMC. This model targets customers with high income and high education who are busy and have many needs at the same point of sale.

Along with that, the company also aims to serve a diverse customer group by launching the Winmart+ Rural model with a portfolio of good locations, average imported fruits, and promotions. Accordingly, the performance of WCM's store models is clearly shown in Masan Group's third quarter 2023 financial report.

Specifically, WCM's net revenue increased by 2.1% in the first 9 months of 2023 and 3.3% in the third quarter of 2023 over the same period, thanks to the opening of new stores. At the end of September 2023, WCM had 3,586 stores nationwide, including mini supermarkets and supermarkets.

WinMart+'s LFL revenue growth over the same period improved to -5.9% in the third quarter of 2023, compared to -9.6% in the first half of 2023. LFL revenue growth at WinMart improves to -3.8% in the third quarter of 2023, compared to -7.7% in the first half of 2023.

Consumers shop for MEATLife-branded meat at a WinMart supermarket. Photo courtesy of Masan Group

The renovated store chain's revenue growth was in line with expectations; WIN's Like For Like YoY growth in the third quarter was 4.8%. Like For Like mini supermarket chain, opening before 2022, recorded an after-tax profit margin of 2.2% in the third quarter (the second consecutive year with positive after-tax income).

WinCommerce also successfully built a clean vegetable socialization strategy for WinEco, signed long-term contracts with local suppliers and distributed domestic pepper and agricultural products. The private label development strategy and the company's logistics platform Supra also create potential for growth.

Masan said these are important results that give confidence to the board of directors about achieving break-even for the entire group in 2024. To increase customer benefits and stimulate spending, Masan plans to integrate Phuc Long and Lazada into the WIN Membership program.

By the end of October, the number of WinCommerce stores had reached 3,600.

As mentioned, Masan's third-quarter net revenue reached VND20,155 billion, an increase of 3.2% over the same period in 2022. The consumer business alone had revenue of VND17,149 billion, accounting for 85%. Third quarter gross profit reached VND5,940 billion, of which 97.5% was also in the consumer business segment.

Customers at a Phuc Long Tea and Coffee store. Photo courtesy of Masan

Masan’ coffee & tea brand – Phuc Long Heritage (PLH) has also achieved positive results. In the third quarter PLH recorded a 33% slightly rise in profits compared to the second quarter and gradually recovered compared to 2022.

One of the is driving force for Masan’ growth has also been investment by Bain Capital. In last October, Masan announced the signing of this agreement to receive at least US$200 million in equity investment in Masan Group. With support from Bain Capital, Masan Group will have abundant resources to implement its growth strategies.