A screenshot of FPT Shop’s website. FPT Retail teams up with Fado to sell international products – PHOTO: CHI THINH
HCMC – FPT Digital Retail JSC, or FPT Retail, has cooperated with cross-border ecommerce platform Fado to sell international products made in the United States, Japan and Germany, a representative of FPT Retail announced.
Customers can now purchase these products on the website https://hangmy.fptshop.com.vn/.
The representative said that the international products available on the website have clear origins, and that under the agreement, Fado will bear legal liability in terms of commodities, while FPT Shop will act as an intermediary with domestic customers.
The international products on the website are diverse, including electronics, cosmetics and clothes.
After selecting products on the website, shoppers can make online payments or place deposits at FPT stores.
Customers will receive an alert when their selected products are delivered to the stores of their choosing.
U.S., Japanese and German products are purchased from well-known ecommerce platforms in those countries of origin, according to the representative.
According to Chi Thinh, The Saigon Times
FPT Retail’s Shareholders General Meeting: The profit will increase by 20%, Long Chau chain still incurs losses
FPT Digital Retail Joint Stock Company’s Shareholders General Meeting (FPT Retail, code: FRT) has passed the business plan for 2019 with the target revenue of VND17,700 billion, up 16%, and the profit after tax of VND418 billion, up 20% compared to 2018.
In that, the revenue is contributed mainly by media which is ITC, with the expected amount of VND17,200 billion; regarding the new industry, which is Long Chau pharmaceutical chain, such sector may contribute only VND500 billion in the revenue without generating profits, the expected loss is VND20 billion.
The promotion of installment purchase and accessories distribution contributes to the growth of 2019
In 2018, FRT implemented the F.Friend program (a companion program with enterprises) at about 250 factories for the employees. This year, FRT will gradually shift its focus to officers.
At the same time, the Company still continues to cooperate with Vinaphone so as to boost the sales. Such channel has brought FRT about VND1,000 billion in the revenue of 2018. It is expected that this program will make the revenue increase by VND300 billion, contributing VND1,300 billion to the total revenue this year.
With the campaign to improve products’ life, the main purposes are to stimulate the customers to buy more products, purchase old machines to exchange new machines, exploit the form of installment payment – accounting for 32% of total revenue. In 2019, FRT plans to increase the contribution from such business to 45%, equivalent to VND1,700 billion, which will be included in the target revenue of VND2,500 billion in order to ensure the growth of 16%.
According to statistics, for former retail chains, the revenue from installment purchase accounts for 50% of the total revenue, so according to Mrs. Diep, FRT still has chances to promote this activity.
In addition, the Company also boosted its accessories segment, with the goal of bringing the revenue of VND1,000 billion, up 67% compared to 2018. At the moment, FRT has worked with the suppliers to buy products from its origin in order to have a 20% more competitive price than the market price while the profit margin still increases by 10% compared to previously.
Concerning online channel, 4 years ago, this sector only contributed 7-8% in FRT’s total revenue, but in 2018, it contributed up to 15%. For the plan in 2019, such business is expected to contribute VND1,000 billion, besides the products of Samsung, Oppo, etc., FRT will include more exclusive products of some specialized labels for online items. At the same time, FRT will deploy new products and new industries. FRT also continues to combine e-commerce exchanges to take advantage of their promotion policies and increase the rate of access.
It is until 2020 that the pharmacies will general profits
Ms. Diep said that for the period from 2019 to 2022, the pharmacies chain will be the main and potential segment that contributes to the growth of FRT.
In 2019, the Company expects to open 50 new pharmacies in order to have 70 stores in total. For the succeeding years, FRT will open about 100 new stores each year. By 2020, Long Chau is expected to have 700 stores.
The pharmaceutical market’s size is of about USD4,5 billion per year, (excluding the consumption goods in the market without invoiced, smuggled goods), which is the same as the size of mobile phone industry. People’s living standards are increasing, there are more willingness to spent on health. In addition, there are more than 30,000 pharmacies nationwide, such number is three times higher than the number of mobile phone stores in the past and such industry is the leading one at the moment.
Therefore, Ms. Diep said that, after the development of distribution system, there is no reason for not considering importing medicines for trading, or even producing medicines ourselves.
FRT will focus on the logistics sector and develop pharmaceutical personnel. Its ambition is to account for 30% of the pharmaceutical market share through pharmacies in the next 3 to 4 years, this industry will contribute about 40% to the total revenue of FRT (about VND10,000 billion).
Ms. Diep shared that, each Long Chau pharmacy is estimated to bring about VND3 billion per month with more than 6,000 SKU, while in other chains, it is about 2,000 SKU, with the revenue of VND600-700 million per month.
Being questioned about the break even time of the stores, Ms. Diep said that she couldn’t state a definite number because in 2018, they were experimenting many different models, hence the break even time depended on the experimented shop’s style. Since 2019, this model has been applied widely in Bien Hoa, My Tho, Long An, the situation in Ho Chi Minh City is quite stable.
At the moment, there are 3 types of pharmacies: A, B and C depending on the location and the area, therefore the investment cost will be different, however, it is about 70-80% of the FPT Shop’s expenses. The inventories is about 1,5 times of the total expenses for construction and repairs. Concerning liabilities, FRT negotiated with the counterparties to pay within 15 to 30 days.
For the plan in 2019, the chain of pharmacies is expected to contribute VND500 billion in the revenue while it still incurs losses of VND20 billion. . The target for 2020 is to reach the revenue of VND2,000 billion and to stop incurring losses; by 2021, revenue of VND4,300 billion and profit of VND62 billion and by 2022, the revenue of VND6,500 billion and profit of VND193 billion.
The Shareholders General Meeting also approved ESOp stock issuance statement in 2018 and policies for 2019; statement of dividend payment, in which 10% by cash and 15% by shares (paid in the second or third quarter of 2019). The Board of Management and the Board of Supervision will also not receive remuneration by cash in 2018 and 2019.
In addition, there is a statement to ask for the shareholders’ opinions on transactions with related parties. Specifically, in 2018, FRT has recovered all the loans of nearly VND71 billion from Ms. Diep. According to Ms. Diep, that was when the Company appointed her to buy Long Chau chain as an individual for the experiment to see whether it is safe and suitable for the development, FRT will later apply such model.
Besides that, FRT also borrowed VND20 billion from FPT Corporation (FPT) last year.
According Phan Hang, Tin nhanh Chung khoan
In 2019, FPT Retail has planned to reach the net revenue of VND17,700 billion, profit after tax of VND418 billion, equivalent to the growth of 16% and 20%, respectively.
The accessories bring high profits
In order to achieve the growth target set out, FPT Digital Retail Joint Stock Company (HoSE: FRT) will open new stores, boost online sales, increase the industry of accessories and sim cards.
Specifically, regarding IT industry, FRT will open 100 new stores in order to have 633 stores in total. Accessories such as memory cards, cases, backup chargers, etc. are expected to bring about VND1,000 billion in revenue for FPT Retail this year. The reason why FRT focuses on developing accessories is because such sector brings high profits.
According to Ms. Nguyen Bach Diep, the Chairwoman cum General Director of FPT Retail: “FPT Retail will change the suppliers and buy accessories from its origin in order to have higher profits”, it is increased by 10% compared to previously.
Besides, FRT will focus on sim cards, scratch cards, increase the number of customers coming to the stores with the target to increase the revenue by VND100 billion. Also in this year, FRT will also promote the online sales channels, bringing the stores to residential areas of other districts and communes.
FPT Retail will improve the proficiency the procedures for F.Friends project. Accordingly, F.Friends is the model that FRT will come to the customers and sign contracts. Their staff can buy any products under instalment with 0% interest, the monthly debt will be deducted from the salary. Instalment model F.Friends is more professional than the normal one.
Ms. Diep shared that: “The growth plan of this year is not very easy for FRT, because FRT is a later retailer facing some difficulties, and when it started with such model, the market had already been saturated”, especially at the time when Long Chau pharmacies still incur losses.
Long Chau will generate profits in 2021
Concerning Long Chau pharmacies, FPT Retail expects to open 50 new pharmacies, which means the number of stores is 72 in total. From 2020 to 2022, FRT will open from 100 to 200 new stores each year. By 2020, Long Chau is expected to have 700 stores.
FPT Retail estimates that Long Chau chain is recording the revenue of VND1,6 billion each day. This year’s target is to reach the revenue of VND500 billion, gross losses of VND20 billion. The target for 2020 is to reach the revenue of VND1,910 billion and to stop incurring losses. By 2021, Long Chau will start to generate profits with the expected revenue of VND4,370 billion and profit of VND63 billion and by 2022, the revenue of VND6,500 billion and profit of VND193 billion.
In order for Long Chau to have good result of operation, in the coming time, FRT will focus on logistics segment and develop the pharmaceutical personnel. The Company expects to account for 30% of the pharmaceutical market share through pharmacies in the next 3 to 4 years. It is predicted that the pharmaceutical industry will contribute about 40% to FRT’s revenue (about VND10,000 billion) in the future.
In 2018, Long Chau chain reached the revenue of more than VND380 billion. Medicines and functional foods accounted for about 58% and 30%, respectively, of the revenue classified by product. The remaining revenue came from medical equipment and cosmetics.
According: Minh Anh, Nhip Cau Dau Tu
The significant decrease in the stock price caused the market price of each FPT Shop fall down to VND5,5 billion, which is unreasonable according to Ms. Nguyen Bach Diep.
From the beginning of 2019 until now, the stock price of FPT Digital Retail Joint Stock Company (FRT code) plummeted. At the end of 2018, FPT Retail’s stock price was at VND71.900 per share. At 28 March, the stock price of FPT is at VND48.000 per share, down more than 33%.
Ms. Nguyen Bach Diep (holding the microphone), is giving speech at the FPT Retail’s Annual General Meeting of Shareholders 2019 – Photo: Hai Dang
“However, according to our evaluation, we consider that such price is far lower than the real value of FPT Retail”, a contributor of FPT Shop said.At the FPT Retail’s Annual General Meeting of Shareholders held on 27 March, after being questioned on such issue, Ms. Nguyen Bach Diep – the Chairman of FRT cum General Director of the Company – admitted that FPT Retail’s shares have just been listed for less than 1 year, the Board of Management is not experienced in the stock exchange, and they have no idea about why the stock price falls dramatically.
With the current stock price, Ms. Diep is calculating the market price of FRT of VND3,200 billion. If such price is divided to 570 stores of Long Chau and FPT Shop, the average value of each store is at VND5,5 billion.
Ms. Diep stated that such revaluation is unreasonable, because the cost of construction, inventory, brand costs, operating personnel, website with a high rate of access, switchboards, etc., in total, will exceed the amount of VND5,5 billion.
“If compared to other retail chains, even listed and unlisted chains, the value of each of their store is from VND20 to VND50 billion, therefore, it is not reasonable that the value of FPT Shop is VND5,5 billion.”
A store of FPT Shop is about to open – Photo: Hai Dang
“The large scale and high profit of pharmaceutical industry are a direction for potential development of the Company,” added by Ms. Diep to prove that the market value of FRT is being evaluated incorrectly.With the acquisition of Long Chau drugstores since 2017 for business expansion, Ms. Diep said that there is high potential in the pharmaceutical retail industry. The scale of such industry is estimated to be at VND4,5 billion – the same as mobile industry – as a result, if FRT holds about 30% of the market share without the presence of any big retailers, FRT’s revenue can increase greatly from this new industry.
Although Ms. Diep does not know the reason for the dramatic decrease in the stock price, she thinks perhaps it is due to late payment, little transactions, which make the stock price go down.
“In general, we have recognized these issues and are having some solutions such as purchases of consulting service and we will have ways to improve the payment issue”, said the CEO of FPT Shop.
In 2019, FPT Retail has planned to reach the revenue of VND17,700 billion, profit after tax of VND418 billion, equivalent to the growth of 16% and 20%, respectively, compared to 2018. Ms. Diep revealed that in 2019, they will open 100 additional stores, reaching 633 stores in total. Besides the expansion in large central areas, the new stores will be available in residential areas of unexploited districts and communes.
In 2018, FPT Retail’s total revenue reached VND15,298 billion, up 16% compared to 2017. Online revenue was at VND2.432 billion, with the growth of 21%. Profit before tax reached VND435 billion, profit after tax reached VND348 billion, up 20% compared to 2017.
According to Hai Dang, ICTNews
AGM of Shareholders of FPT Retail: Plan to expand number of pharmacy stores to 70 into provinces neighboring Ho Chi Minh City
FPT Retail stated they are planning to expand in 2019 the number of pharmacy stores into 70 into provinces neighboring Ho Chi Minh City such as Binh Duong, Long An, etc. Meanwhile in Ho Chi Minh City, there has been no Long Chau store failing to break even later than 6 months.
In the morning of March 27 at Continental Saigon Hotel, FPT Digital Joint Stock Company (FPT Retail, HoSE stock code: FRT) held its Annual General Meeting of Shareholders of 2019.
At the AGM, shareholders voted to approve significant contents of the Company including: Approving the 2018 income statement of 2018 and audited financial statements, the 2019 business plan; the profit distribution plan for 2018 and 2019, the plan of issuing ESOP shares for 2018 and ESOP shares issuing policy for 2019; the report on remuneration for the Board of Management and Supervisory Board in 2018 and the remuneration plan for 2019.
In the year 2019, FPT Retail aims to achieve 17,700bn in turnover and 428bn in expected profit after tax, which means a growth rate of 16% and 20% respectively compared to 2018.
FPT Retail stated they are planning to expand in 2019 the number of pharmacy stores to 70 into provinces neighboring Ho Chi Minh City. The pharmacy industry has significant long-term growth potentials. Therefore, FPT Retail set the initiative to develop into this industry with good planning and control as similar to operating the electronic retail system of the Company. The Company will accordingly focus on building logistics, increasing the number of pharmacy stores and developing a staff with suitable management and professional capabilities.
In Vietnam, the pharmacy retail industry is divided practically into 3 channels – hospital channel, clinical channel and pharmacy store channel. FPT Retail expects to gain a market share of 30% of the pharmacy store channel in the coming 3-4 years. Accordingly, the pharmacy retail industry is anticipated to contribute about 40% into FPT Retail’s expected turnover of 10,000bn VND.
At the AGM, FPT Retail leadership shared the plan to open Long Chau pharmacy stores in provinces neighboring Ho Chi Minh City including Binh Duong, Long An, etc. Stores in Ho Chi Minh city has quite stable business performance without any store having breaking-even point later than 6 months. Moreover, the number of Long Chau pharmacy stores can be small but they achieve 3bn VND of turnover each month, while an ordinary store can do only 300-400mn per month.
As for the store network, FPT Retail said apart from urban centers, new FPT Shops would be opened further towards residential areas of presently uncovered districts and communes.
The Company will also keep on improving and applying many technologies in the process of approving and managing customer files and risks. Furthermore, FPT Retail would develop project staff at each region in order to search for and utilize optimally potentials from affiliated businesses as well as to run the project more effectively.
For instance, with the F.Friends program, the Company’s representatives would directly reach enterprises for contract signing, after which employees of such enterprises would be allowed to buy any product on credit at the interest rate of 0%, monthly installments would be deducted directly into their salaries. The FPT Retail leadership sees this as more professional buying compared to normal buying on credit.
As for the share price, the leader of this retail chain said that the FRT share is at a very high price compared to its genuine value. The Company is hiring consultants to find suitable solutions in this matter for shareholders.
According to Thanh Long, VietnamFinance
FPT Retail plans to open 48 new stores of the Long Chau pharmacy store chain in this year.
At the annual general meeting of shareholders in the morning of March 27, most questions of investors for the leadership of FPT Digital Joint Stock Company revolve around the venture into pharmaceutical retail section. This is the new section deployed by the Company since the end of 2017 after its acquisition of Long Chau pharmacy stores chain.
Ms. Nguyen Bach Diep, the Company’s Chairwoman of Board of Directors and CEO admits it was very daring of her to obtain over 70bn from the Company to personally venture into this section although she had no relevant experience. She decided she had to acquire a pharmacy store chain of small scale to limit risks and evaluate performance.
“When learning of our intention to join the pharmaceutical retail section, many chains offered to sell their stores and brand names to us. However, we chose Long Chau as the chain possessed 4 stores, each of which gained a whopping average turnover of 3bn VND per month. We were intrigued to know how they could attract customers and how their turnover vastly outdo other chains,” said the FPT Retail’s leader.
After 2 years of taking-over, Ms. Diep experimented various models for the pharmacy store chain including putting them in the same location of FPT Shops to cut location cost, utilizing the readily available customer base or opening pharmacy stores adjacent to competitors’ stores in the same area and around hospitals.
By the end of last year, Long Chau pharmacy store chain expanded to 22 stores in Ho Chi Minh City, Dong Nai with new stores to be opened in Tien Giang and An Giang.
A pharmacy store of FPT Retail in Cu Chi District, Ho Chi Minh City. Photo: Long Chau Fanpage.
FPT Retail estimates the pharmacy store chain is recording a turnover of 1.6bn per day. This year turnover is expected to be 500bn, while net loss is expected to be about 20bn.Pharmaceutical retail brought in over 380bn of turnover in 2018. Medicines and functional foods account for 58% and 30% respectively in the structure of turnover by product. The rest come from medical equipment and cosmeceuticals.
The Company’s leadership thinks bearing the small amount of loss for the first 2 years for chain building is normal. Such bearing is even more satisfactory in comparison with when the Company began developing its mobile phone retail section as vast amounts of resources were poured into building logistics, increasing the number of pharmacy stores and building a staff with suitable management and professional capabilities.
“There are 30,000 pharmacy stores of various sizes nationwide, but there is no truly dominating player. Opportunities are still abundant out there. Our key task is to expand to 70 stores within this year and to 700 by the end of 2022,” said Ms. Diep. She also stated she would evaluate the possibility of distributing or investing into pharmaceutical factories should there be favorable conditions.
In her previous interview with VnExpress Ms. Diep gave the opinion that the pharmaceutical retail section had high profit potentials backed by various indicators. For instance, the market size is about 4.5bn USD (equivalent to the size of mobile phone section and higher than that of household appliances and laptop retail sections) with guaranteed 2-digit annual growth rate thanks to its independence from economic situations and the estimated annual spending
USD on pharmaceuticals of each Vietnamese person, etc.
According to Phuong Dong, Vnexpress
Saturation has hit the mobile phone retail market, which urges FPT Digital Joint Stock Company (FPT Retail, stock code: FRT) to get a firm grasp on the pharmaceutical retail section and venture into trading products it has no experience about.
Acquisition of the Long Chau pharmacy store chain
FPT Retail dedicated the whole year of 2018 in experiments and search of a general formula for expansion of Long Chau pharmacy store chain with the number of stores in 2021 30 times as many as the current number.
Previously in the end of 2017, Ms. Nguyen Bach Diep, Chairwoman of BOD of FPT Retail, the person undertaking to borrow nearly 71bn VND from the Company to “secretly” buy 75% of stocks of 4 stores of Long Chau pharmacy chain. Throughout the experimental period, Ms. Diep informed the press this was her personal project.
At the 2019 Annual General Meeting of Shareholders held recently, Ms. Bach Diep disclosed the experimental period of Long Chau chain model in 2018 when store locations were continuously changed. Store locations moved from streets near crowded residential areas to areas around hospitals and markets, even adjacent to competitors’ stores.
There was an experimental location which made very good turnover and gained profit right in the first month.
At the acquisition, Long Chau chain had 4 stores and suffered a monthly loss of about 100mn VND each month as the medicines were near or past expiry dates. This amount has now lowered to over 10mn VND each month, while the daily turnover of the 22 store chain scores 1.6bn VND.
FPT Retail expects Long Chau chain’s loss in 2019 to be 20bn VND and a turnover of 500bn VND.
“In 2020, this pharmacy store chain will reach the breakeven and bring in 1,910bn VND in turnover. In 2021, Long Chau will make a profit of 62bn VND and the turnover of about 4,370bn VND,” Ms. Diep believed.
At the 2018 AGM, FPT Retail presented the plan to open only about 400 Long Chau pharmacy stores from then to 2022. However, after finding a general business formula, the Company announced a more ambitious plan of making a turnover of 6,500bn VND from 700 Long Chau stores and a profit of 193bn VND in 2022.
Beside medicines, Long Chau stores will also trade in medical equipment, cosmeceuticals and functional food.
Ups and downs with “the bitten apple”
FPT Retail is testing in 3 projects, one of which being the electronic appliances section. Meanwhile, this enterprise with 347bn VND of profit for 2018 is having a hard time with products under the brand name Apple.
“We estimated there was about 40% of the market of Apple products were distributed as hand-carried goods. But the ratio may have risen to above 60%. Trading of newer iPhone versions are getting gloomy and FPT Retail is requiring support from Apple and delaying opening new F.Studios,” Ms. Nguyen Bach Diep shared.
At the 2018 AGM of FRT, the plan of 12 F.Studios featuring Apple products would be expanded to 100 studios in the next 4 years, while there were only 2 new F.Studios last year.
When the time comes, the F.Studios will prove FPT Retail has strengths in high-end products. Moreover, its direct importation of iPhone, Macbook, iPad products from Singapore will cut down intermediary costs.
In compensation for the turnover of F.Studios chain, FPT Retail will concentrate its resources into the important business retail section of accessories in this year with the expectation of 1,000bn VND in turnover and nearly 500bn VND in gross profit.
According to Hong Phuc, Bao Dau Tu
On FPT Shop’s website, this retailer has started its sales business of electronic products to compete with its rival, The Gioi Di Dong.
FPT Shop has launched a page of electronics on their website selling products such as refrigerators, televisions, washing machines and cameras, etc.
According to FPT Shop’s website, this chain has cooperated with the retailer Nguyen Kim in selling these new items. Therefore, besides the main product of mobile phones, this retailer of FPT Corporation has decided to start its business in household electronic products.
FPT Shop cooperated with Nguyen Kim in selling electronics online – Photo: Hai Dang
The representative of FPT Shop revealed that the cooperation is still in progress and has not yet been made public. The sales of electronics is being conducted online only.On the website of the mobile retail chain with the second largest market share in Vietnam, there are a wide variety of products such as air conditionings, air purifiers, speakers, cameras, household appliances, office equipment, etc. which are products provided by Nguyen Kim, a long-term technology retailer in Ho Chi Minh City.
Before FPT Shop, The Gioi Di Dong has opened Dien May Xanh which specializes in selling electronics, and at the moment, this chain has the biggest market share in such industry.
According Hai Dang, ICTnews
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.
In the morning of March 27 at Continental Saigon Hotel (132 – 134 Dong Khoi Street, Ben Nghe Ward, District 1, Ho Chi Minh City), FPT Digital Joint Stock Company (FRT) held its 2019 Annual General Meeting of Shareholders.
The 2018 income statement and 2019 business plan were reported at the AGM. At the AGM, shareholders voted to approve significant contents of the Company including: Approving the 2018 income statement and audited financial statements, the 2019 business plan; the profit distribution plan for 2018 and 2019, the plan of issuing ESOP shares for 2018 and ESOP shares issuing policy for 2019; the report on remuneration for the Board of Management and Supervisory Board in 2018 and the remuneration plan for 2019.
Turnover in 2018 reached 15,298 bn VND
In 2018, FPT Retail recorded a total turnover at 15,298bn VND, 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 348 bn, up by 20% compared to 2017. In order to achieve such business results, the Board of Management and Board of Directors implemented effective solutions for the 2018 business plans and continuously generate new business plans.
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 of 2017.
After re-activating the F-Friends selling on credit program and the Subsidy selling price support program in the end of August 2018, sales from the two programs contributed 5.3% and 5% respectively in FPT Retails’ total turnover in 2018.
Ms. Nguyen Bach Diep – Chairwoman of Board of Directors and CEO of FPT Retail shares that the Company sets its 2019 net turnover target at 17,770bn VND, profit after tax at 418bn VND, increasing by 16% and 20% respectively.
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, 1,780,887 visits of which were directly interactive with customers. This aids in a soar in online trading sales of the Company in 2018, up by 21% compared to 2017.
2019 – Year of investing in expansion of the Long Chau pharmacy store chain
In the year 2019, FPT Retail aims to achieve 17,700 bn in turnover and 428 bn in expected profit after tax, which means a growth rate of 16% and 20% respectively compared to 2018.
In order to realize the plan step by step, FPT Retail will implement concurrently its key business retail sections.
As a part of the whole 2019 plan, the Company will expand into other retail sections with pharmaceuticals being at the top of the list as FPT Retail plans to expand the number of Long Chau pharmacy store to 70 and increase coverage nationwide.
According to the Company’s leadership, the pharmaceutical section has significant long-term growth potentials. Therefore, FPT Retail set the initiative to develop into this section with good planning and control as similar to operating the electronic retail system of the Company. The Company will accordingly focus on building logistics, increasing the number of pharmacy stores and developing a staff with suitable management and professional capabilities.
In order to achieve the turnover target of 17,700bn VND, one of the key business sections gets heavily invested is pharmaceutical retail section with the expansion of the Long Chau pharmacy store chain to 70 stores.
In Vietnam, the pharmaceutical retail section is divided practically into 3 channels – hospital channel, clinical channel and pharmacy store channel. FPT Retail expects to gain a market share of 30% of the pharmacy store channel in the coming 3-4 years and the section will contribute about 40% into FPT Retail’s expected total turnover of 10,000bn VND.
Moreover, the Company will also strongly develop the section of accessories and SIM cards. With its many years of experience in the technical goods retail industry, FPT Retail realized the section of phone accessories and SIM cards is one of the highly profitable sections.
Therefore, FPT Retail boldly sets turnover targets for 2019 of accessories at 1,000bn VND, up by 350 bn VND, while collection SIM card is expected to increase by 100bn VND. These will be strategic sections contributing into turnover and high profit for FPT Retail in 2019.
In the face of the e-commerce boom, FPT Retail will offer numerous promotional and discount programs to fit best the online selling method. To be specific, products of equivalent quality and guarantee policy when being sold on the website will have lower prices compared to when being sold at shops. Moreover, new products will be constantly updated by the manufacturers with priority for eye-catching, trendy products expected to sell well.
According The Hai, Bao Dau Tu
While its core retail section of mobile phones is getting saturated this year, the FPT Digital Joint Stock Company (FPT Retail, stock code: FRT) seeks to boost growth through the new section of electric appliances and plans to rapidly expand size of the pharmacy store chain.
“Electric appliances is one of the sections we are negotiating and about to test,” Ms. Nguyen Bach Diep, Chairwoman of BOD and CEO of FPT Retail informed Forbes Vietnam beside the 2019 AGM held in the morning of March 27. The Company plans to test selling electric appliances inside FPT Shops, said Ms. Diep.
There are 3 projects being in test. Informing shareholders on the new direction of FPT Retail, Ms. Diep said the Company would evaluate and cut sale area of product groups in saturation phase while increasing space for the new section, the investment plan of which would be made public when highly successful test results are reached.
With the mobile phone market heading into gradual saturation, seeking new markets is what large retail chains like Mobile World and FPT Retail are doing. Mobile World has expanded into the food section with its Green Stores and the recently announced wristwatch retail section. Meanwhile FPT Retail expanded its pharmaceutical retail section.
According to the market research agent GfK Vietnam, the mobile phone market grows only by 1% in 2018 compared to 9% in 2017. The electric appliances section, however, has a higher growth rate, specifically 23.5% in electronics, 12.5% in electronic refrigeration and 3.7% in household electronics.
FPT Long Chau expects loss of 20bn VND in 2019 and gains profit from 2021 onwards. Source: FPT Retail (unit: bn VND)
In 2019, FPT Retail will boost development of the pharmaceutical retail chain under brandname FPT Long Chau after acquiring the Long Chau pharmacy store chain well-known in Ho Chi Minh City 2 years ago. From a modest start of 4 stores, now the chain has 22 stores located mainly in Ho Chi Minh City. The chain scored a turnover of 384bn VND in 2018, up by 91% compared to 2017.
According to Ms. Nguyen Bach Diep, for the period from 2019 to 2022, pharmaceutical retail is the key and potential section driving FPT Retail’s growth. The Company will increase the number of stores to 70 with the target turnover of 500 bn, while expecting a loss of 20bn for this section.
“If results are successful, we will continue to open 100-200 new stores each year,” said Ms. Diep. “Our first goal is increasing coverage nationwide while controlling logistics and investing into the staff.”
Ms. Diep emphasized the currently gigantic potentials of the pharmaceutical retail section with a spending size of about 4.5bn USD, equivalent to that of the mobile phone market. FPT Retail expects to gain a market share of 30% of the pharmaceutical retail section in the coming 3-4 years and the section will contribute about 40% into FPT Retail’s expected total turnover of 10,000bn VND.
The leader of FPT Retail shared that western medicines contributed 58% in turnover for the year 2018. However, functional food is the section with the best profit margin contributing 49% in FRT’s profit, followed by medicines and medical equipment.
According to the plan for developing the pharmacy store chain, FPT Retail aims to stop planned loss in 2020 and begin to profit from 2021 onwards. However, Ms. Diep has not been able to pinpoint the breakeven as this depends on each store model being tested by the Company.
The Company divides the pharmacy store chain into 3 types A, B and C corresponding to different turnover and investment sizes. Ms. Diep said a type A store gained at least 1.2bn in monthly turnover, type B store and type C store 1.2bn and under 1.2bn respectively. For the first phase, the Company focuses on developing type A stores.
Despite contributing only 30% in turnover, the functional food section adds half of FPT Long Chau’s gross profit. Source: FPT Retail
The store with highest turnover currently gained 9bn/month, said Ms. Diep to Forbes Vietnam. Most of the new stores will be opened this year with the lowest turnover of about 700mn/month. According to Ms. Diep, one of the reasons why FPT Long Chau stores attract customers well and fill numerous medicinal prescriptions is the availability of more than 6,000 various products.
At the end of 2018, FPT Retail gained a total turnover of 15,298bn, up by 17% and profit after tax of 348bn, up by 20% compared to 2017. Despite the saturation of the mobile phone market, the turnover of this section alone increased by 24% thanks largely to new shops continuously being opened. FPT Retail still has to seek new paths for growth, as according to plans, the mobile phone retail chain with current 533 shops will stop expanding after 2019.
The retailer is also turning to other sections like F.Friends – a selling program which helps FPT Retail reach employees of factories and enterprises. In 2018, this program had more than a million members, most of whom are workers from 2,500 factories in cooperation with FPT Retail. The Company plans to turn the focus to office staff workers in enterprises.
Moreover, FPT Retail wants to develop the phone accessories retail section this year, which is expected to bring in 1,000bn in turnover and almost 500bn in gross profit.
According Truong Bui – Pham Nhi, Forbes Viet Nam