Bách Hóa Xanh, a popular Vietnamese supermarket chain, has announced its expansion plans for August 2024. The company aims to open 7 new stores across 4 provinces: Ho Chi Minh City (3 stores), Long An (1 store), Binh Duong (1 store), and Dong Nai (2 stores). This expansion comes as a positive sign, as the number of Bach Hoa Xanh stores has largely remained stagnant over the past two years. As of Q2 2024, the chain operates 1,701 stores, with a modest increase of 3 stores compared to the beginning of the year.
Earlier in 2022, the company made a bold move to close down hundreds of stores as part of a restructuring and rebranding strategy, shifting its positioning from a “modern market” to a “mini-supermarket.” This recent expansion plan comes on the heels of the supermarket chain’s first profitable quarter.
According to the Q2 2024 financial report of Mobile World Investment Corporation (MWG), Bach Hoa Xanh’s revenue for the first half of the year reached VND 19.4 trillion, a 42% increase compared to the same period last year and the highest ever achieved. Notably, the chain reported a profit of nearly VND 7 billion in Q2 2024, marking the first time it has turned a profit. The monthly revenue for this quarter showed consistent growth, with June 2023 crossing the VND 3,650 billion threshold. Impressively, the average revenue per store hit a record high of VND 2.1 billion per store per month, excluding the impact of the Covid-19 pandemic in July 2021, which caused a temporary spike in revenue.
Bach Hoa Xanh attributed this success to its strategy of focusing on revenue growth and optimizing operational costs, particularly in store operations and logistics. Despite modest growth in consumer spending, the company benefits from the ongoing shift from traditional to modern retail channels.
The recent milestones achieved by Bach Hoa Xanh validate the expectations of MWG’s management, as reflected in the statement made by Chairman of the Board, Nguyen Duc Tai, who predicted that the supermarket chain would be the main driver of MWG’s growth in the next five years.
Nguyen Duc Tai also shared his vision for Bach Hoa Xanh’s future, stating that the company plans to expand to a significant scale and eventually list on the stock exchange, fulfilling their commitment to investors and the expectations of shareholders. He emphasized that when the company reaches a large enough scale and achieves profits in the billions, Bach Hoa Xanh will be ready to enter the stock market.
CEO of Bach Hoa Xanh, Pham Van Trong, expressed his confidence in the company’s potential, believing that a four-digit profit (in trillions) is achievable within the next 1-2 years.
Significant Growth Potential: Projected 2024 Revenue of Over VND 39,000 Billion
In a recent report, FPTS Securities Company assessed Bach Hoa Xanh’s strategy after its repositioning as a mini-supermarket. The chain now focuses on its standard store model (150-200 sq. m) and offers a diverse range of 3,000 products, including fresh produce and fast-moving consumer goods (FMCG). This product range is more extensive than that of its competitors in the mini-supermarket segment, such as WinMart+, Satrafoods, and Co.op Food. This diversity is a competitive advantage for Bach Hoa Xanh, attracting new customers and increasing the purchasing frequency of existing ones. Additionally, fresh produce acts as a gateway for customers to buy FMCG products with higher gross margins.
