The Mobile World (MWG) Completes Store “Phase-Out”

At the MWG investor meeting for Q2 2024, Mr. Dao The Vinh, a member of the Board of Directors, announced that MWG had essentially completed the closure of The Gioi Di Dong and Dien May Xanh stores by the end of June this year.

MWG representatives also provided more detailed information about the restructuring process of The Gioi Di Dong and Dien May Xanh chains, which included three activities:

First, regarding the closure of underperforming stores, these are stores that did not meet revenue expectations or incurred high costs. Especially once a store is closed, it is highly likely that the customer flow will not be lost but transferred to nearby stores. The review process has been carried out since Q4 of last year until the early months of this year.

Second, it is related to streamlining the personnel team. And finally, restructuring salary and contract policies to make employees more proactive and dynamic, along with the policy of “managing ownership at each store.”

“The number of stores will be adjusted depending on the time. If the market develops strongly and many opportunities arise, we will focus on expanding the scale to increase revenue and market share. However, in the context of the current difficult market, MWG focuses more on the ‘quality’ of each store,” said Mr. Vinh.

On the other hand, regarding personnel arrangement when stores are closed, MWG leaders said that there is no plan to recruit new personnel and prioritize the reuse of personnel from closed stores.

“Wiping out” hundreds of stores, revenue still increased strongly

As recorded in the semi-annual report for 2024, MWG has promoted the review and closure of inefficient stores. In June alone, the number of The Gioi Di Dong stores (including Topzone) decreased by 24, while Dien May Xanh decreased by 87 stores. This is the most significant closure in the history of the Dien May Xanh chain and the second-largest closure in the history of The Gioi Di Dong. If compared to the peak period at the beginning of 2023, the scale of the two electronics and appliance chains has decreased by hundreds of stores.

Notably, the revenue brought about was almost unaffected by the scale reduction and even grew in the past few months. Dien May Xanh chain achieved nearly VND 5,100 billion in revenue in June, only a 3% decrease compared to May. MWG said that revenue decreased because it was out of the peak season for air conditioners, but the TV segment grew by double digits thanks to the benefit of the Euro football tournament. More impressively, the The Gioi Di Dong chain recorded a nearly 9% increase in revenue to VND 2,400 billion, the highest in eight months, as mobile phone sales increased.

It can be seen that the two electronics and appliance chains of MWG have passed the booming phase and no longer have much room for strong breakthroughs. However, MWG continues to strive with the strategy of “reducing quantity and increasing quality,” thereby consolidating stable growth.

In a recent report, SSI Securities assessed that the closure of The Gioi Di Dong and Dien May Xanh stores was mainly in areas with high store density, so customers could still shop at nearby MWG stores. The demand for air conditioners in record-breaking hot weather and the demand for TVs during the EURO 2024 season also contributed to MWG’s revenue.

In the coming time, the notable information is that Apple has requested its authorized retailers in Vietnam to remove Apple products from livestream channels. This could help reduce competition between offline and online sales channels, thereby supporting the recovery of retailers’ profit margins. Among mobile phone and appliance retailers, MWG is the least affected in terms of livestream sales revenue. Therefore, the company will benefit from the recovery of profit margins while possibly not losing much revenue from livestreams.