FPT Retail aims to gain a 30% share for the pharmacy store market while hiding nothing about its intention to engage into pharmaceutical manufacturing and importing industries.
Pharmaceuticals retail will be the key and potential business section of the Company in coming years, informed Ms. Nguyen Bach Diep, CEO of FPT Digital Joint Stock Company (FPT Retail). At FPT Retail’s 2019 AGM of Shareholders, Ms. Diep reported that the Company’s pharmaceuticals retail chain would expectedly score a turnover of 6,500bn VND and gain a share of about 30% of the pharmaceutical retail market via pharmacy stores.
Ms. Nguyen Bach Diep (holding the microphone) reporting at the FPT Retail’s 2019 AGM of Shareholders – Photo: Hai Dang
FPT Retail’s Long Chau pharmacy store chain currently has 20 stores, with 50 more to be opened this year, i.e. 70 stores in total in 2019 gaining an expected turnover of 500bn VND. The expansion speed will be faster, which will expectedly result in 700 stores in 2022.FPT Retail’s current largest turnover source comes from the FPT Shop technology retail chain. According to the forecast by GfK, the mobile phone retail section grows by only 1% in this year and steps into saturation. In order to maintain the growth of turnover, technology retail chains start seeking expansion into new retail sections. Mobile World, the competitor of FPT Shop, selects to build up a convenience store chain to be their key section in the years to come. Meanwhile, FPT Retail opts to develop in the pharmaceuticals retail section as Ms. Diep has stated.
“The present size of the pharmaceuticals retail market is about 4.5bn USD, equivalent to that of the mobile phone retail section. Therefore this new section has vast potentials and will become the key section of FPT Retail in the coming years,” reported Ms. Diep.
According to her, the whole nation has about 30 thousand small pharmacy stores, 3 times as many as the number of mobile phone shops in the past. However, there has been no chain big enough to become the dominator. Moreover, living standards of Vietnamese people have been going up. Therefore, the needs for functional food also increase as a consequence. If profound research into pharmaceuticals can be made, FPT Retail can engage in manufacturing and importing medicines in the future apart from the pharmaceutical retail chain business.
The Long Chau store chain currently bears a loss of 20bn VND and will expectedly break even in 2020. The expected turnover of 6,500bn VND in 2020 has not covered the plans for manufacturing, importing or distributing medicines if such engagement is implemented, explained Ms. Diep.
FPT Retail is experimenting on opening new Long Chau stores or utilizing the location and customer base of some FPT shops for such new stores. Apart from the market of Ho Chi Minh City, Long Chau stores will also be opened in provinces including Binh Duong and Long An, etc.
Long Chau pharmacy store located beside a FPT Shop – Photo: Long Chau
Beside the pharmacy store chain, the 2019 business plan of FPT Retail will also focus on core business sections of the Company, while sections including SIM cards, online trading, selling on credit to enterprises and opening new stores will be boosted.
In the year 2019, FPT Retail aims to achieve 17,700bn VND in turnover and 428bn VND in expected profit after tax, which means a growth rate of 16% and 20% respectively compared to 2018.
FPT Retail sets the 2019 turnover target for accessories at 1,000bn VND, up by 350bn VND, while turnover from collection SIM card is targeted to increase by 100bn VND. These will be strategic sections contributing into turnover and high profit for FPT Retail in 2019.
Ms. Diep informed that in this year the Company will import accessories directly from production locations to get lower prices. Therefore accessories prices in 2019 will be lower, but the profit can be 10% higher compared to the previous period.
As for the online trading section, the Company will cooperate more closely with partners specializing in online trading to get reasonable prices. Products of equivalent quality and guarantee policy when being sold on the website will have lower prices compared to when being sold at shops.
Ms. Diep said the Company would open 100 more stores in 2019, increasing the total number of stores to 633. Beside expansion into urban centers, new stores will reach further towards residential areas of presently uncovered districts and communes.
Income statement for 2018
In 2018, FPT Retail recorded total turnover at 15,298bn VND, which is a up by 16% compared to 2017. Turnover from online trading reached 2,432bn, which recorded a rise by 21%. Profit before tax reached 435bn and profit after tax reached 348bn, up by 20% compared to 2017.
By the end of December 2018, the total number of FPT Shops is 533 with an increase of 60 shops compared to the end of December 2017. Average sales of each shop scored 2.4bn/month, with a slight increase compared to 2017.
Moreover, the number of F-Studio by FPT shops (including APR and AAR side-by-side shops) reached 14 in 2018. Sales of this shop chain contributed 423bn in FPT Retail’s total turnover, up by 61% compared to the same period in 2017.
In 2018, FPT Shops’ online trading section continued to grow. Accordingly, the website FPTShop.com.vn had 360,325,253 visits with a 41.6% increase compared to 2017. This aids in a soar in online trading sales of the Company in 2018, up by 21% compared to 2017.
According to Hai Dang, ICTNews