Companies - April 13, 2022 | 04:38 am PT

Masan bets on mini malls to reach new revenue milestone

Private conglomerate Masan Group is eyeing a new revenue peak of VND100 trillion ($4.37 billion) this year by betting big on its "mini mall" strategy of satisfying every consumer’s need.

Customers shop in the first franchised WinMart+ outlet in Hanoi. Photo courtesy of Masan Group

The recently announced target, up 12.8 percent from last year, will include a 40 percent contribution from WinMart retail outlets, a key part of its "point of life" strategy.

To achieve its goals, Masan plans to transform its current WinMart and WinMart+ outlets into "mini malls," streamlining a complete retail and service experience to consumers.

The malls will include financial services by Techcombank, beverages by Phuc Long Tea, medicines from Phano Pharmacy, and mobile services by new telecommunication brand Reddi.

This means that nearly 2,800 WinMart and WinMart+ outlets across the country will become places where people go to for almost any need, from withdrawing or depositing money, getting a SIM card, or just for a cup of tea, with cashless transactions available for all services.

"The mini mall model is the key to integrate all spending demands of consumers and expand our operations from offline to online," Masan chairman Nguyen Dang Quang said recently.

This is how Masan will be able to serve 100 million consumers without a "cash burning" strategy that is being used by e-commerce platforms, he added.

Rural areas, therefore, play a major role in the company’s strategy as this is where most consumers are located.

Masan plans to have 30,000 mini malls nationwide by 2025, with plans to integrate two more "missing pieces" in its ecosystem – content and entertainment.

The group first launched two franchised WinMart locations in December last year, and it plans to take this number to 200 this year.

Masan expects that the mini mall model will meet 60-80 percent of consumers’ demand, up from the current 25 percent.

Quang also said that artificial intelligence and machine learning will be utilized this year to perfect the retail ecosystem.

The technologies will analyze the shopping preference of each store to reduce the number of days goods are stored in the inventory while increasing customer satisfaction.

The group also seeks to identify its customers and personalize their shopping experience.

Masan Group joined the retail industry in December 2019 by acquiring the WinMart operations (formerly VinMart) from Vingroup, the nation’s largest private conglomerte. As of now, WinMart remains the biggest retail chain in the country.

The group brought down the chain’s loss of VND5.6 trillion in 2019 to VND1.4 trillion last year, the smallest loss it has recorded since 2015.

In February, Masan announced it had spent an additional $110 million to increase its ownership in the Phuc Long beverage chain from 20 percent to 51 percent.

HSBC Research earlier this year released its first report on Masan Group’s stock, saying that the target price of MSN could reach VND200,000 this year, up 24 percent from the beginning of the year.

HSBC analysts expect the potentials of WinMart outlets, together with the impact of Reddi telecom services and Phuc Long drinks, will serve a wide range of customers and drive revenues up.

They value WinCommerce, operator of the outlets, at $3.2 billion.

Last year, Masan raised $2.3 billion from several investors including South Korea’s SK Group, China’s Alibaba and Baring Private Equity Asia.

Phuong Dong, Tat Dat, Dat Nguyen

 
 
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