The Strategies and Products that Drive WinCommerce’s Sustainable Profitability

Since Masan Group Joint Stock Company (Masan Group – stock code: MSN) acquired the VinCommerce retail chain (now renamed WinCommerce) from Vingroup, investors have always been concerned about “when WinCommerce will be profitable.” And that question has now been answered.

In its announcement of the second-quarter 2024 financial results, Masan stated that WinCommerce recorded a positive after-tax profit in June, a clear sign of a trajectory towards sustainable profitability in the coming periods. WinCommerce also recorded a 9.2% revenue growth compared to the same period, reaching VND 7,844 billion across its network in the second quarter of 2024.

According to Masan Group’s 2023 annual report, WinCommerce holds a 25% market share in modern retail value and a 50% network share. Moreover, 90% of the system’s stores have reached the EBITDA breakeven point, compared to only 5% when Masan acquired this business.

Masan’s annual report also highlights that the key to WinCommerce’s success lies in implementing effective business strategies, developing innovative store models, and curating product portfolios suitable for each locality while remaining simple and offering a unique shopping experience for consumers across all income levels. This strategy draws on Masan’s extensive experience in the FMCG model.

WinCommerce’s impressive turnaround is a testament to its effective business strategies and customer-centric approach.

What strategies led to WinCommerce’s success?

First, in its customer attraction strategy, WinCommerce launched the WiN Membership program, piloted in the fourth quarter of 2022 and rolled out nationwide in January 2023. This program has offered consumers promotions on fresh produce items and monthly and weekly discounts, thereby enhancing its customer attraction capabilities. To date, the WiN Membership program has attracted 10 million registered customers and aims to reach 30 million members in the next five years. The average shopping frequency of members is four times per month, with their basket size being double that of non-members.

WinCommerce’s WiN Membership program has been a powerful tool in enhancing customer loyalty and engagement.

Second, to increase the program’s benefits and enhance the user experience, Masan integrated its products into the WiN Membership program. Specifically, upon successful registration and their first purchase, customers receive a complimentary Welcome Drink from Phuc Long, up to a 20% discount on essential basket items, and a 20% savings on WinEco fresh produce and MEATDeli chilled meat. This approach enables all Vietnamese people to access “Fresh, Delicious, and Premium!” products at competitive prices.

Third, WinCommerce implemented a “best price” strategy across its chain. WinCommerce proactively collaborates with reputable suppliers to ensure competitive pricing while maintaining a price index that is equal to or better than the market. This “best price” strategy is further bolstered by “homegrown” products manufactured by Masan Consumer (a subsidiary of Masan Group) and distributed through the WinCommerce system.

WinCommerce’s “best price” strategy, coupled with efficient logistics and supply chain management, has been pivotal in its success.

WinCommerce also focused on profit growth and further gross profit margin improvement by optimizing logistics costs and reducing merchandise losses. By concentrating on transportation and distribution processes and implementing AI and Machine Learning in its management system, the internal supply chain, Supra, helped WinCommerce optimize logistics costs by up to 11%.

Fourth, with a consumer-centric business strategy, WinCommerce continuously strives to meet the diverse needs of Vietnamese consumers by raising the bar and committing to offering safe, fresh, and nutritious products. WinEco, a WinCommerce subsidiary providing fresh produce, employs state-of-the-art technology and stringent control processes from seed germination to packaging, ensuring the highest product quality standards. Additionally, in line with Masan Group’s “Go Global” strategy, in July 2024, the 12th container of WinEco’s clean glass lettuce arrived in South Korea, marking the presence of Vietnamese clean vegetables on the global vegetable map.

WinCommerce’s commitment to offering safe, fresh, and nutritious products has been a cornerstone of its success.

Fifth, as part of its sustainable development strategy, WinCommerce is currently linked with thousands of households nationwide, working directly with producing households, cooperatives, and agricultural product supply enterprises to plan for procurement and consumption of their produce. Additionally, WinCommerce transfers quality management processes, provides guidance on merchandise preservation, and invests in additional systems for warehouses in key raw material and production regions across the country, contributing to a closed chain from farming, livestock, supply, procurement, and retail.

Through these effective growth strategies, a focus on product quality, and a consumer-centric approach, WinCommerce has solidified its position in the Vietnamese retail market and improved its operational efficiency, paving the way for sustainable growth. As a result, the intrinsic value of the enterprise will continue to reach new heights.