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Business

MWG sets $4.67bn net revenue target for 2019

Released at: 17:11, 24/12/2018

MWG sets $4.67bn net revenue target for 2019

Photo: MWG

Retailer's Board approves Business Plan for FY2019.

by Minh Do

The Board of Directors at the Mobile World Investment (MWG) has approved the Business Plan for FY2019, with net revenue targeted at VND108.4 trillion ($4.67 billion) and net after-tax profit VND3.6 trillion ($155.2 million).

The plan will now be presented to the AGM, tentatively scheduled for March.

The phones and consumer electronics retail business will remain the main pillar generating revenue and net profits for the company in 2019. Consumer electronics retail is considered the key driver of MWG’s growth, with aims to acquire a market share of approximately 40 per cent. Phones retail, meanwhile, will retain its leading position and achieve higher growth than MWG’s competitors.

MWG recorded consolidated net revenue of VND79 trillion ($3.4 billion) in the first eleven months of this year, up 34 per cent year-on-year, while after-tax net profit was VND2.6 trillion ($122.1 million), an increase of 33 per cent year-on-year.

As a result, MWG has fulfilled 92 per cent of the revenue target for FY2018 and exceeded the net profit target.

Year-on-year revenue growth in the first eleven months was 70 per cent in consumer electronics products, 18 per cent in phones and tablets, and 214 per cent in food and FMCG.

Online revenue reached VND10.9 trillion ($469.3 million) in the period, equal to 13.8 per cent of total net revenue. Online turnover rose 113 per cent year-on-year and represented 109 per cent the 2018 target.

As at November 30, MWG’s Bach Hoa Xanh (BHX) had 404 stores in operation and recorded net sales of VND484 billion ($20.8 million) in November. The Average Monthly Sales Per Store for stores opened before November 1 was over VND1.1 billion ($47,300).

It now has 310 standard and large stores in Ho Chi Minh City and Binh Duong, Long An and Dong Nai provinces, or approximately 77 per cent of the total, up from 270 at the end of October and including 20 large-scale stores and 23 provincial stores.

BHX has 30-40 stores either newly-opened or upgraded from the old format every month, and proactively closes some legacy underperforming stores. This effort will slow down during the holiday season and conversions are expected to be completed within the first quarter of 2019.

MWG has concentrated on online FMCG retail at Vuivui.com since September because grocery retail has been contributed approximately 70 per cent of total sales in Vietnam, according to a Euromonitor report. Demand for online shopping of food and necessities are therefore considerable.

Due to this strategy, MWG transferred the website’s backend, logistics, and delivery force to Bachhoaxanh.com on November 27, to better serve customers shopping for food and necessities and realize MWG’s ambitious goal of becoming a Top FMCG online retailer in the country.

Its target is to dominate the online retail business in the three categories that account for the largest share in Vietnam’s retail market by value: mobile phones, consumer electronics, and groceries, through the successful operation of the Thegioididong.com, Dienmayxanh.com, and Bachhoaxanh.com websites.

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