RELIANCE RETAIL BRINGS “MODERNIZATION” TO INDIAN RETAIL
Billionaire Mukesh Ambani once shared his ambition to “modernize” Reliance Retail’s retail segment, aiming to boost consumption for 1.5 billion Indians, regardless of class, and providing an omnichannel shopping experience, with personalized products and services, both online and offline.
Accordingly, Reliance Retail has built “New Commerce,” a business model that creates a new commerce platform to serve 1.5 billion Indians by establishing an omnichannel sales system across modern trade (MT), traditional trade (GT), and e-commerce.
Reliance Retail has actively expanded its network of stores, building nearly 20,000 supermarkets and minimarts to serve the diverse consumption needs of Indians.
Operating a pan-Indian commerce platform requires a diverse range of quality goods at competitive prices, along with a nationwide logistics system to ensure timely and cost-effective delivery. To address this challenge, Reliance Retail has also ventured into consumer goods production, offering private label products to consumers and kirana stores. The company has implemented real-time technology in store operations and supply chain management, enhancing forecast accuracy, automation, and operational productivity.
The “New Commerce” model enables Reliance Retail to autonomously supply products to 1.5 billion Indian consumers at every touchpoint, leveraging an omnichannel platform and a technology-driven logistics system. This explains why Reliance Retail’s revenue surpasses that of all other Indian retailers combined, with a valuation of up to $100 billion.
WHICH VIETNAMESE ENTERPRISE HAS THE FULL POTENTIAL TO “MODERNIZE” VIETNAMESE RETAIL?
Similar to India in the past, according to Euromonitor, the Vietnamese market is still in the early stages of modern trade development (~12% retail market share) and e-commerce (<3% retail market share). Therefore, in recent years, Vietnam has witnessed the rise of modern retail companies such as WinCommerce, The Gioi Di Dong, PNJ, FPT Shop, Long Chau, and e-commerce platforms like Shopee, TikTok, and Lazada.
Vietnam’s modern trade market is similar to Indonesia’s in 2010, when modern trade accounted for 12% of the market share. It grew by 18% annually over the next five years, reaching a 17% retail market share as Indomaret and Alfamart accelerated their store openings (averaging 2,500-3,000 stores per year), thus accelerating retail modernization.
So, which enterprise has the financial capacity, existing assets, and operational capabilities to build “New Commerce” in Vietnam and seize the opportunity to serve 100 million Vietnamese consumers?
One of Vietnam’s leading consumer retail companies, the Masan Group, with its focus on WinCommerce, the country’s largest minimart and supermarket chain, possesses all the necessary elements to create the “New Commerce” model.
According to Statistics in 2023, India ranked 6th in the world for two-wheeler ownership. This characteristic is similar to Vietnam, which has the second-largest two-wheeler market in the world, after Thailand. This is also one of the factors shaping the strategy of both Reliance Retail and WinCommerce. As a result, both giants remain loyal to the “one-stop-shop” minimart model, catering to the high number of motorcycle owners and the daily shopping habits of local consumers.
Vietnam’s Largest Store Network: WinCommerce currently operates nearly 3,700 minimarts and supermarkets nationwide. In 2023, WinCommerce developed new store models targeting different customer segments in various regions. The WiN store model caters to urban consumers, while WinMart+ Rural targets rural customers. Both WiN and WinMart+ Rural have shown positive results, with like-for-like (LFL) growth of 6.3% and 10.7%, respectively, in Q2 2024. This contributed to the overall chain’s 9% growth and helped WCM achieve positive net profit in June. Notably, the company has announced consecutive net profits in July, marking the second month of profitability in ten years of operation.
Production Capacity and Strong Brand Building: Masan’s consumer retail ecosystem owns leading FMCG and meat brands such as Chin-Su, Nam Ngư, Omachi, Kokomi, WakeUp 247, MEATDeli, Ponnie, and Heo Cao Bồi, along with WinCommerce’s private labels, creating a seamless connection from production and brand building to sales. This enables Masan and WinCommerce to offer consumers high-quality products exclusively developed by the group’s ecosystem.
Nationwide Technology-Driven Logistics System: In early 2022, Masan established Supra, now a subsidiary of WinCommerce, to serve the group’s ecosystem and provide cost savings for consumers and partners. Currently, the Supra distribution center network comprises ten clusters (including six dry and four cold clusters). Supra handles approximately 60% of WinCommerce’s total cargo volume and is implementing artificial intelligence (AI) technologies to automate and enhance the accuracy of supply planning.
WIN Membership Program: In 2023, WinCommerce launched the WIN Membership Program, which now has ten million members, serving as a crucial link between brands and consumers.
Masan and WinCommerce have successfully established the fundamental elements of the “New Commerce” model in Vietnam, including a nationwide store network serving both urban and rural areas, autonomous product supply to consumers and partners, a technology-driven nationwide logistics system, and the WIN Membership Program connecting products, brands, and over 100 million consumers nationwide.
In July, WinCommerce’s minimarts achieved a 4% LFL revenue growth compared to June, leading to consecutive months of net profit. This indicates significant potential for profit margin improvement in Q3 and contributes to the overall profitability of the Masan Group.
Priority: Focus on allocating resources to complete the East Route North-South Highway
The prioritization of resources in completing the East-West North-South highway, the East-West expressways, and the planned multimodal transport connections, has been requested by the Politburo. In addition, investments in urban railway lines and large-scale mass transit systems in Hanoi, Ho Chi Minh City, and other major cities are to be continued.
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“WinCommerce: Unlocking Retail’s Unique Advantage”
Masan Group’s retail arm, WinCommerce, has revolutionized the retail industry with its unique “New Commerce” model, leveraging its exclusive strengths in production, distribution, and in-house logistics. Within the Masan ecosystem, WinCommerce has transformed into a profitable venture, turning a decade of operations into a successful and thriving business.
