After Super Cheap Phones, Mobile World (MWG) opens a chain of micro electronics: Target to open 1,200 stores, encroach on markets in the Philippines, Myanmar and Indonesia

Tram Ho

In the latest move, Mobile World (MWG) has stopped exploiting the low-cost phone chain. Once a strategy to expand the existing market, the low-cost chain specifically targets the mid-to-mid-end segment, with the desire to gain ~ 20% more market share from retail stores that are price-focused customers. However, MWG soon terminated the project due to its inefficiency, similar to, Bigphone, and An Khang.

 Sau Điện thoại Siêu rẻ, Thế giới Di động (MWG) mở chuỗi điện máy siêu nhỏ: Mục tiêu mở 1.200 cửa hàng, lấn sân thị trường Philippines, Myanmar và Indonesia - Ảnh 1.

Continuing, MWG said that the trial at the low-cost phone chain, although unsuccessful, was also the premise for the small-area (120-150m2) Supermini Dien May Xanh model: specializing in providing about 60% of the The item of basic telephone – electronic products aimed at serving customers in rural areas, going deeper into the district – commune routes, there are no modern electronics shops.

Up to now, the first micro-DMX stores in Tien Giang (Mekong Delta region) have recorded relative sales results. In which, the first 17 micro DMX stores in Tien Giang recorded an average monthly revenue / store of about 1.1 billion VND compared with about 4.1 billion VND of DMX mini stores (300- 350 m2) and about VND 8.5 billion of standard DMX stores (800-1,200 m2) in the same province.

Recognized by Ban Viet Securities (VSCS), the micro DMX stores recorded a gross profit margin of about 23% compared with about 21% of the existing TGDD and DMX stores. This positive gross margin is underpinned by the higher sales contribution of the household goods group (20% -25% compared with about 15% of other DMX models).

As for operating costs, the rental costs of the DMX micro store are approximately 25% of the cost of the DMX mini store. Meanwhile, each DMX micro store hired only 4 employees (excluding the store manager) compared with 12-15 employees of DMX mini store.

MWG is planning a major expansion for the micro DMX model from now until the end of 2022. Up to now, MWG operates 28 micro DMX stores and expects to reach 70-80 stores by the end. September. The management continues to set a target for the total number of micro DMX stores to reach 300/700 / 1,200 by the end of 2020/2021/2022, thereby expanding the company’s market share in the electronics segment from 40%. in the first 6 months of 2020 to 45% / 55% / 60% by the end of 2020/2021/2022.

Particularly in 2020, MWG plans to deploy this new model in a total of 19 provinces / cities in the Southeast and Southwest regions, then nationwide in 2021. Each province / city is expected to have 15-20 doors. very small DMX goods.

Even so, MWG’s management aims to expand into international markets as a long-term growth driver for DMX. In the existing Cambodia market, MWG maintains its target of having 50 ‘Bluetronics’ stores (a model equivalent to DMX, with an area of ​​about 200 m2, according to the management) by the end of 2020, which will support MWG to become electronics chain in Cambodia.

As for potential new markets such as the Philippines, Indonesia and Myanmar, MWG said the Company’s market research shows that MWG’s current store models can be successful in these countries. On the other hand, management sees the possibility that domestic regulations adversely affect foreign retailers as well as the ability of consumers to understand the psychology and culture of consumers in these countries. consciousness needs to be overcome.

MWG affirms that DMX has plenty of room to increase gross profit margin through product size and structure. For product structure, the Company plans to increase the contribution from private brands, OEM products as well as exclusive products, helping to consolidate its market dominance.

MWG has summarized the business situation in July 2020 with revenue of 8,669 billion VND, down 7% over the same period due to the impact of the epidemic on purchasing demand for mobile phones and electronics. In contrast, EAT increased 13% to 327 billion dong.

In the first 7 months, MWG achieved consolidated net revenue of VND 64,308 billion, an increase of nearly 6% and NPAT of VND 2,353 billion, down more than 2% compared to the same period in 2019. Compared to the plan, MWG achieved 58%. revenue target and 68% profit target for the whole year.

In terms of revenue structure, DMX is still the largest contributor with 56% proportion. Forecast for 3Q2020, MWG said that according to business cycle, this is the lowest season for consumer electronic products. Besides, the 2nd Covid-19 wave also negatively affected people’s income. In this context, the Company is working on solutions to increase purchasing power in the DX chain.

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Source : Genk