Looking back on An Khang’s 2-year journey: From rapid expansion and optimism to sudden stoppage and a loss of over 300 billion VND per year

In 2022, Thế Giới Di Động incurred a loss of 306 billion dong after implementing an extensive expansion strategy. In 2023, the company temporarily halted its expansion to focus on increasing revenue per sales point, controlling costs, and aiming for profitable operations. However, the result was a further loss of 343 billion dong.

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In 2022, An Khang pharmacy chain has continuously changed its strategy. In the first half of that year, An Khang expanded rapidly, increasing from 178 stores to 510 stores in just 6 months. This is the stage that Mr. Nguyen Duc Tai, Chairman of The Gioi Di Dong, believes that to make a profit in the drug industry, this is the right time to grow the pharmacy chain model.

By July 2022, An Khang appointed Mr. Doan Van Hieu Em as the CEO. At that time, Mr. Hieu Em stated that the speed of An Khang’s chain expansion is surpassing the initial expectations of the Board of Directors and may complete the plan to have 800 stores in 2022. He was also confident that An Khang would have a profit and revenue of 2,000 billion VND by the end of 2022.

However, 3 months later, An Khang only managed to increase the number of stores to 529 by the end of October 2022, and Mr. Hieu Em said that the company would stop expanding the An Khang chain because the market was “too volatile and challenging”.

By the end of 2022, the number of An Khang pharmacies decreased to only 500. At the same time, the financial report of The Gioi Di Dong also showed that An Khang recorded a loss of 306 billion VND in 2022.

In 2023, the company’s leaders stated that only stores with positive profit margins would be retained. The ultimate goal of An Khang this year is to achieve profitability.

In a message to The Gioi Di Dong shareholders in 2023, Chairman Nguyen Duc Tai also stated that, after reaching a scale of 500 pharmacies by the end of 2022, the company had temporarily stopped expanding to focus on increasing revenue at each sales point, controlling costs to aim for profitable operations.

However, according to the actual figures of this year, An Khang continued to incur losses of 343 billion VND, bringing the total losses in the past 2 years to nearly 650 billion VND. The number of stores increased slightly in the first half of the year, and then decreased in the final months of the year.

According to “Business Direction 2024” of The Gioi Di Dong, the company no longer mentioned the word “profit” when talking about the goals of An Khang. Instead, The Gioi Di Dong wants to achieve double-digit revenue growth, increase market share, and achieve break-even before December 31, 2024.

Specifically, The Gioi Di Dong will invest deeply to turn An Khang into a leading pharmacy chain for health care: Diversify product portfolios; ensure sufficient drugs; improve the quality of the pharmaceutical team; apply technology to provide convenient and best health care solutions for customers.

In 2024, An Khang may enter an expansion phase if it operates stably, efficiently, and successfully builds a business model.

SOURCEcafef
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