MWGMWG | Investor Meeting Notes: 2019 Business Guidance (posted on 16 Feb 2019)
Posted date: 16/02/2019
|Unit: billion in VND
|Consolidated net revenue
In 2019, consumer electronics retailing is still the main pillar for MWG’s revenue growth, targeting to reach 40% market shares in Vietnam. Phones retailing business continues to maintain the leading position and positive growth rate compared to the overall market.
The growth of phones and consumer electronics are attributable by:
- New store opening (mainly DMX mini), conversion from TGDD stores to DMX or DMX mini stores and from DMX mini to DMX. The total new DMX mini and DMX stores adding from both new opening and conversion effort are estimated at 150. The post-conversion stores are expected to recorded an average of 50% revenue growth compared to their previous performance. The total store count by end of 2019 will be approx. 1900 stores.
- Changing the DMX mini’s store layout for optimizing the number of SKUs and product display area. The expected number of stores for changing layout will be approx. 200. These stores will record an approx. 30% revenue growth while their rental and operating expenses almost unchanged.
- Adding new product categories, expanding more brands and SKUs for current product groups.
- Optimizing operation by: all products display, prices and promotions at the stores will be systematized and implemented by QR code to ensure consistent execution. This allows MWG to control each product displayed at the right position, optimized inventory stocking.
BHX will continue to solidify its foundation in 2019 for the aggressive expansion nationwide after BHX becomes profitable at stores and DC level. Although revenue contribution of BHX in MWG’s top line is not significant, the grocery retail business is expected to achieve highest y-o-y growth. MWG targets that the gross profit generated from BHX can entirely cover the operating expenses of all stores and distribution centers, excluding the G&A expenses at the company level, latest by Dec 2019, by:
- Accelerating the store opening, targeting to operate more than 700 stores by end of 2019;
- Standardizing an effective format for provincial stores, focus on expanding to Mekong Delta and Southeast region.
- Continuing to improve the gross margin through (a) proactively work with FMCG manufacturers to have better trade terms, good marketing budget and attractive consumer promotions, (b) review the operational process and optimize the supply chain for fresh foods.
- Implementing modern solutions for enhancing productivity at stores, DC and logistic activities (for example: automatic conveyors and Pick-to-Light system helps to double productivity, save costs and reduce errors in the process of picking up / handling goods for minimarts in warehouses).
MWG will successfully maintain the leading position in Vietnam’s online retailing by:
- com and dienmayxanh.com continue to be the No.1 phones and consumer electronics shopping websites with more than 50% market share in Vietnam;
- com serving the online shopping demand for FMCGs will focus on widening the product selection and improving customers’ experiences in 2019. BHX aims to be the destination for online grocery shopping in the near future.
Category: Internal analysis