By “not putting eggs in one basket,” Mobile World has overcome a difficult period in early 2020

Tram Ho

Multidisciplinary model helps quite good business results in difficult times

According to the business results report for the first two months of 2020, Mobile World (HOSE: MWG) achieved consolidated net revenue of VND 20,541 billion (up 18%) and profit after tax of VND 845 billion (up 16 %) over the same period in 2019.

This double business result helped January 2020 – fall in New Year, often have high sales – “save” for February business results which are often not good due to the low season.

Nhờ không bỏ trứng vào một giỏ, Thế Giới Di Động đã vượt qua giai đoạn khó khăn đầu năm 2020 - Ảnh 1.

One space covers all current chains of MWG: Mobile World, Dien may Xanh, Bach Hoa Xanh, An Khang pharmacy, Super-cheap Mobile. Photo: Hai Dang

In order to achieve growth in this difficult period, the company said that thanks to the two Mobile World and Green Electronics chains, the total sales increased slightly compared to the same period in 2019 and the positive contribution from the chain. Department Store

Specifically, the revenue contribution from the Bach Hoa Xanh chain has a strong growth, from 5% in February 2019 to 16% in February 2020. Sales of this chain increased 155% over the same period last year.

In the context of technology and electrical goods being not prioritized for procurement in the current period, MWG clearly feels the initial contribution of the department store chain – which is their non-core business segment – into the company’s total sales.

Mr. Nguyen Duc Tai, co-founder and chairman of MWG’s Board of Directors, once compared to the Bach Hoa Xanh chain which is in the period of conception and expansion, as a “younger brother” in the family, needs two “elder” chains. Mobile World and Green Electronics nurture success. Once the younger brothers graduate, go to work, and they will take care of the other brothers.

The creation of a multi-industry retail chain has also begun to work for Mobile World in the current period. When electronics and technology products were not prioritized for shopping, people poured in to buy essential goods, the Bach Hoa Xanh chain started to contribute revenue to the group. In the end, if customers restrict money to Mobile World or Green Electronics and transfer it to Bach Hoa Xanh, eventually the money will go to this multi-industry retail system!

For the first time the mobile segment has grown by 0%, MWG needs the “Department of Green”

In the first two months of 2020, MWG recorded the first time that telephone chain revenue has not increased compared to the same period. The two Mobile World and Super Cheap chains have a total of 1,015 stores but contributed only 28.8% of revenue, the first time without growth.

Mobile World Chain now sells phones and related accessories, along with laptops. Meanwhile, Green Electronics is a larger model of Mobile World chain, selling more electronics, electronics, home appliances, …

According to data from market research firm GfK, the smartphone market in Vietnam in 2019 is not growing. However, Mobile World still maintains a higher growth than the market, often at 5% or more. However, January, February 2020 of the Mobile World chain has not grown, indicating that the difficult period of the mobile retail chain is beginning.

Meanwhile, Dien may Xanh has 1,028 stores, contributing the largest revenue (58.6%) to the whole chain. This was thanks to the increase in refrigeration and home appliances of over 15%. In particular, the laptop industry recorded a strong growth of 80% over the same period.

From the revenue contribution of only 5% a year ago, in the first two months of this year, the “Bach Hoa” juniors chain contributed nearly 15% of the revenue to the whole MWG. This shows that the Green Department is gradually playing an important role in the context that the mobile chain is not increasing.

If said in the analogy of Mr. Nguyen Duc Tai, the younger brother who is going to university seems to be doing quite well to make up for the two brothers who are not in the best business phase.

Earlier, in a meeting with analysts last month, Mr. Tran Kinh Doanh – CEO of Bach Hoa Xanh – said that this chain is currently expanding, so it cannot bring profits to the group.

“However, if two brothers, The Gioi Di Dong and Dien Dien Xanh, say that they can no longer provide me with education, the department will stop expanding, then I believe it will be profitable soon,” he said. Doanh said.

In the upcoming business strategy, MWG said that it is proactively slowing down the expansion plan, but still prioritizes the opening of Bach Hoa Xanh stores that have prepared premises and personnel in advance.

Starting from the chain of mobile phone shops, MWG grew faster and expanded more quickly than its competitors. After No. 1 with Mobile World chain, MWG opened the Green Electronics system, then continued to open a chain that did not belong to the strength of Bach Hoa Xanh, and acquired Phuc An Khang drugstore chain (and changed its name to An Khang). This “do not put eggs in one basket” strategy is taking effect in the current period when cash flow of people is pouring into necessities.

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Source : Genk