Retail’s Resilience: How the WinMart Chain Turned a Profit

In the first half of 2024, Vietnam’s retail and service industry thrived, recording over VND 3 quadrillion in revenue, an impressive 8.6% increase from the previous year. Notably, certain sectors experienced significant growth, with the sale of staple foods, cultural and educational goods, household items, and tourism-related services surging by 10.4% to 37.1%. Meanwhile, other sectors, such as clothing, transportation, and other services, witnessed more modest increases, ranging from 2.4% to 9.6%.

Retail businesses have shown remarkable resilience and recovery compared to the low base period of the previous year. Notably, WinMart, Vietnam’s largest retail chain operated by Masan, has maintained its strong performance, consistently delivering positive revenue and profit figures.

WinMart Turns Profitable in June 2024

In terms of efficiency, WinMart began generating profits in June 2024, following a comprehensive reorganization of its stores and the continuous implementation of improvement strategies. In the second quarter of 2024, WinCommerce, the company operating WinMart/WinMart+/WiN stores, achieved a 9.2% growth in revenue compared to the same period last year, reaching VND 7,844 billion across its network.

WinMart Store

This success is attributed to the company’s efforts in upgrading and improving its WiN stores, catering to urban consumers, and WinMart+ Rural stores, serving customers in rural areas. These two store models have outperformed the traditional model, achieving growth rates of 6.3% and 10.7%, respectively, in the second quarter of 2024 compared to the previous year.

WinCommerce’s growth accelerated to 6.8% in the second quarter of 2024 and further increased to 9.7% in June, driven by a rise in the number of customers visiting their stores. This indicates a clear path toward sustainable profitability in the upcoming periods.

The Winmart system is expected to remain profitable in the last two quarters of the year, with revenue projected to maintain its growth rate of over 9%. According to a report by Bao Viet Securities, “In the first half of 2024, WCM focused on converting existing WinMart+ stores into WIN stores in urban areas and WinMart+ Rural stores in rural areas. These new store models, especially WinMart+ Rural, have shown impressive results, with higher LFL (like-for-like) sales growth per store compared to the average of the entire chain. Moreover, these new models have already achieved net profits in LFL stores in the first half of 2024.” This indicates that WCM has found a winning formula, positioning itself for profitable expansion.

WinCommerce’s Strategy

In 2023, WinCommerce (WCM) completed its restructuring process and returned to its expansion strategy, focusing on distinct models for different regions and customer segments. As part of its “Point Of Life” strategy, the WiN store chain targeted urban consumers and achieved a 7.3% growth in sales, while the WinMart+ Rural stores in rural areas offered affordable quality products, resulting in an 11.2% sales growth. WinCommerce leads the market with over 50% of the total number of outlets in the modern retail channel.

Retail Chains Expand to Capture Recovering Consumer Demand

In addition to its urban development, WinCommerce is also focusing on rural areas, which account for 65% of Vietnam’s population and represent a market size of approximately $50 billion. This presents a significant opportunity for modern retailers to tap into.

As of June 2024, WCM operated 3,673 outlets, opening 40 new stores since December 2023. The company aims to accelerate its store opening pace in the second half of 2024, targeting 4,000 outlets nationwide by the end of the year.

WinCommerce’s Expansion

With the low base from 2023, retail businesses are expected to continue their growth trajectory in the latter half of 2024. However, each retailer has its unique story and expectations for growth.

Masan has set a revenue target of VND 60 trillion for the WinMart system by 2028, aiming for a profit margin of 3-5%. This goal is based on a planned expansion to approximately 8,000 stores and supermarkets, with an average growth rate of 15% over five years, building upon the 2023 revenue of VND 30 trillion.

According to Euromonitor, Vietnam’s modern retail market is projected to reach $20 billion in the next decade, presenting ample opportunities for retailers to expand their operations and increase revenue.

WinMart, backed by the synergistic strength of Masan Consumer, the leading consumer goods company with brands like Chinsu and Omachi, is well-positioned to capitalize on the recovering consumer demand and drive robust growth.

In Vietnam, WinCommerce is the only modern retailer with the advantage of leading the market in terms of store count. Additionally, it benefits from its association with Masan Consumer, a subsidiary of Masan, and its ownership of Supra, a self-built logistics company. Established in 2022, Supra has helped WinCommerce reduce costs by 11%.

WinCommerce’s Logistics Partner, Supra

In the second half of 2024, WinCommerce remains focused on achieving profitability by accelerating LFL growth to 8-9% year-over-year and maintaining a rapid store opening pace of approximately 100 new stores per quarter. The company will continue to strengthen its presence in rural areas with the WinMart+ Rural model.