In a drugstores race between top electronics retailers Mobile World and FPT Retail that began in 2017, the latter is well ahead.
A drugstore of FPT Retail in Ho Chi Minh City. Photo by VnExpress/Phuong Dong.
FPT Retail, Vietnam’s second largest electronics retailer, announced mid-May that it has opened over 100 drugstores in over 30 provinces and cities, each selling prescription drugs, over-the-counter (OTC) medicines, functional foods and cosmetic products.
Mobile World, the country’s top electronics retailer, only operates 20 drugstores in Ho Chi Minh City. The stores have a total daily traffic of 4,000 visits, according to the company’s website.
Both retailers had entered the pharmaceutical retail market in late 2017, each acquiring their own chain of drugstores, hoping to cash in on a rapidly growing domestic appetite for healthcare and cosmetics products.
Mobile World was initially more aggressive in its approach, taking a 49 percent stake in the Phuc An Khang drugstore chain for an undisclosed sum. The chain was already operating the same 20 stores it has now, except that the name has changed to An Khang.
Nguyen Duc Tai, Chairman of Mobile World, had said then that the company planned to invest a further VND500 billion ($21.47 million) to gradually acquire a controlling stake in the pharmaceutical retail chain, and was eyeing an expansion to increase the number of stores to 100 in Ho Chi Minh City.
“Healthcare is a big market in Vietnam. Apart from Western medicines and vitamins, functional food is a future trend,” Tai had said.
FPT Retail was more tentative when it invested an unspecified sum for a 75 percent stake in the local Long Chau chain, which only operated four stores. Commenting on the acquisition at the time, Nguyen Bach Diep, Chairman of FPT Retail, had said that the investment was made via contribution of “personal capital” and did not affect the company’s core business activities.
FPT Retail had wanted to enter a market that was worth “around $5 billion, which had not yet identified a clear leader,” she said.
Vietnam’s pharmaceutical market is likely to grow to $7.7 billion by 2021 and $16.1 billion by 2026 from around $4.7 billion in 2017, with an average CAGR (compound annual growth rate) of 11 percent per year, according to market research firm IBM Research.
After operating Long Chau for a year, FPT Retail established a subsidiary to manage the drugstore chain with a chartered capital of VND100 billion ($4.3 million). The chain had expanded to 26 stores with an average monthly revenue of VND2 billion ($86,000) per store by the end of 2018, according to FPT Retail’s publications.
Big plans get bigger
Now, with over 100 outlets in operation, FPT Retail recently announced plans to double the number of drugstores to 200-220 by the end of the year, aiming to acquire 30 percent of the domestic drugs market over the next 2-3 years, earning revenues of around VND5 trillion ($215 million).
Diep said the pharmaceutical retail market was of roughly the same size as the mobile phone industry but was not dependent on the national economic situation. Its growth was guaranteed to maintain double figures, particularly with Vietnam’s spending on these products still at a low level.
FPT Retail’s drugstore chain earned revenues of VND500 billion ($21.47 million) in 2019, but suffered a pre-tax loss of VND40 billion ($1.72 million), according to financial statements.
The company said the chain made another VND240 billion ($10.3 million) in the first quarter of this year, but did not say if it made any profit or not.
Meanwhile, the An Khang chain is yet to prove profitable for Mobile World. According to the company’s first quarter financial statements, the company recorded a VND1.4 billion ($60,100) loss, attributed in proportion to its 49 percent shareholding in the drugstore chain.
Cumulatively, Mobile World has lost nearly VND7 billion ($300,000) in An Khang since its 2017 acquisition.
However, according to Mobile World’s management, expansion of the drugstore chain was “put on hold” to assess risks, contrary to their previous expansion plans. Nguyen Duc Tai, Chairman of Mobile World, said in an interview earlier this month that regulations governing the pharmaceutical industry were till vague, so his company was not ready to raise its stake to above 49 percent.
For instance, Vietnamese regulations require individual licensed practitioners and not businesses to stand legally responsible for each outlet, which could give rise to a lot of legal risk, he said.
“An Khang was not bought as a financial investment for reselling. It is still an interesting field, and Mobile World is ready to step up investment when regulations are clear and appropriate with corporate governance principles,” he said, adding that the company was directing investments towards retail groceries instead.
Vietnam’s pharmaceutical market sales are estimated at $6.5 billion in 2019, with hospitals accounting for 75 percent, according to securities firm Viet Dragon Securities.
The Ministry of Health estimates that Vietnam had around 57,000 drugstores last year, most of them small businesses run by families.
Long Chau’s turnover in the first quarter increased by 2.5 times compared to the same period in 2019, FRT plans to open 40 new stores in the second quarter
(VNF) – FPT Digital Retail Joint Stock Company (FPT Retail, HoSE: FRT) has announced the production and business results of the first quarter of 2020.
Long Chau’s revenue in the first quarter increased by 2.5 times compared to the same period in 2019, FRT plans to open 40 new stores in the second quarter. (Photo)
Accordingly, in the period, the Company brought in VND 4,093 billion of turnover, which is decreased by 3% compared to the fourth quarter of 2019. The profit before tax of the Company during the period reached VND 47 billion.
In FPT Retail’s system, Long Chau chain has gained VND 239 billion of turnover, up 20% compared to the fourth quarter in 2014, 2.5 times as much as that in the same period of 2019.
During the period, the Company has been focusing on promoting online sales, especially during Covid-19 epidemic period. Accordingly, the online turnover in the first quarter of 2020 reached VND 1,107 billion, up 20% compared to the fourth quarter of 2019, accounting for 27% of FRT’s total turnover.
Regarding the store network, at the end of the first quarter of 2020, FRT had 603 FPT-shop stores in total. At the same time, there were 83 Long Chau stores spreading across 19 provinces and cities, which is 13 new stores compared to the end of 2019.
Currently, Long Chau has decided on 40 locations to open new stores in the second quarter of 2020.
Besides, FPT Retail has decided on the date of organizing the annual General Meeting of Shareholders in 2020, which is 28 May 2020, under offline and online meeting.
Before that, the Company planned to hold the General Meeting of Shareholders on 20 March 2020; however, the meeting was postponed due to the complicated situation of Covid-19 epidemic.
According to Ha Thu, Vietnam Finance
Published May 6, 2020
Up to now, Vietnam is easing social distancing campaign gradually, FRT – the owner of Long Chau chain – accordingly will launch many practical incentives for the customers.
As one of the units that have been affected heavily by Covid-19 epidemic when the factories in China were locked down from operation, FPT Retail (FPT) has witnessed an increase in profits to VND 35,6 billion in the first quarter.
Promotions will be increased to bolster up the consumers’ demand after social distancing
Sharing with us, the Company’s representative said that the Covid-19 epidemic had a quite serious and multi-dimensional impact on all economic and social fields of our country. Especially for retail companies such as FRT, the difficulties brought by the epidemic are even more pronounced. The previous period of social distancing has somehow affected the business results of our Company. Accordingly, the turnover of March 2020 was decreased by 20% compared to February 2020.
“However, there are even opportunities in challenges, in the epidemic, the trend has been shifted to online shopping, the demand for personal devices to work from home has escalated, FRT has taken advantage of that to sell products, which has improved the risk management. This is also a big hit for FRT to be more creative in order to overcome the difficulties and discover new values”, FRT’s side said.
According to the statistics, FPT Shop’s laptops’ turnover in January 2020 was up by 79% compared to that of January and its turnover in March was up by 172% compared to January, “FRT will continue investing in this segment in the long term”.
At the moment, Vietnam is easing social distancing step by step, FRT accordingly will launch many practical incentives for the customers. To be specific, in this May, FPT Shop will offer big discounts for mobile phones, laptops and the customers can buy pay for many products in instalments with 0% interest and with a prepayment of from only VND 399,000. Concurrently, FPT Shop will also offer free anti-bacteria hand sanitizers and offer home delivery within 60 minutes.
The retail industry is expected to reach USD 180 billion in 2020: FRT will maintain the ICT in order to have new business expansion strategies
According the report of Vietnam Report, in the past few years, the retail industry in Vietnam has experienced rapid growth. The compound annual growth rate (CAGR) in the period 2013 – 2018 was 10,97%. The total retail revenue is expected to reach USD 180 billion in 2020, equivalent to an increase of 26,6% from 2018. However, the dramatic rise of digital and e-commercial retail channels is also worth high attention in the near future.
According to the forecast of World Bank, household expenditure will increase by 10,5% per year on average with the strong growth of middle class. Currently, about 70% of the Vietnam’s populations is financially secured, of which 13% is the middle class according to the world’s standard. Income of those people in this class are rapidly growing, which is very likely to reach 26% in 2016. From 2014, approximately 1,5 million of Vietnamese have joined the middle class per year on average, which indicates that households are reaching higher steps in the economic ladder after escaping the poverty. Economy growth, living-standard improvement and the increase of middle class are solid foundations to bolster up the extension of retail industry in the coming time.
Accordingly, in 2020, FPT Retail will continue to maintain the ICT chain so as to keep the growth rate the same as that in 2019. This is also a fulcrum for FRT to invest and extend new business paths. FRT plans to increase the revenue of the store chain by starting to sell sun glasses and watches in the form of shop-in-shop.
In 2020, there will be 200 new Long Chau pharmacies
In the pharmaceutical industry, there are 83 Long Chau pharmacies spreading across 19 provinces and cities, up 13 stores compared to the end of 2019. Up to now, Long Chau has decided on 40 locations to open new stores in the second quarter of 2020. It is foreseen that Long Chau may reach 200 stores at the end of 2020.
“FPT Retail’s current strategy is to expand the coverage nationwide, accounting for 30% of the pharmaceutical retail marker share through pharmacies in 2 to 3 years”, said the chain’s representative.
In the annual report of 2019, FRT assessed that the pharmaceutical industry in Vietnam is considered attractive for investors. According to BMI, the revenue in this segment will increase from USD 7.7 billion in 2021 to USD 16.1 billion in 2026. The compound annual growth rate will reach 11% in Vietnam Dong.
On the other hand, the pharmaceutical retail industry in our country is very fragmented. Because the average income and health awareness is becoming higher, people tend to choose modern, branding and GPP-standard pharmacies (with good pharmacy practices) instead of small and unqualified pharmacies. This shift is being accelerated party thanks to the Government’s policies that control the pharmaceutical retail industry via pharmacies (Circular 02/2018/TT-BYT regulating on good pharmacy practices)
For FRT, after discovering the secret to success for Long Chau chain, in 2020, FRT plans to expand the chain to 220 stores and increase the coverage nationwide. In the long-term plan, FRT sets goals to develop the pharmaceutical segment in a methodically planned and controlled manner the same as the operation of digital retail segment.
According to Tri Tuc, CafeF
Published May 7, 2020
On 06 March, the Board of Management of FPT Digital Retail Joint Stock Company (FPT Retail) has approved the resolution to appoint Mr Hoang Trung Kien, the member of the Board of Management, as the General Director of FPT Retail since 07 March 2020. Ms Nguyen Bach Diep will continue to be the Chairman of the Board of Management.
Mr. Hoang Trung Kien
In 3 years, FPT Retail aims to improve the operational efficiency of all the business fields and become the leading multi-industry retail company in Vietnam.
In particular, FPT Shop – the digital-product retailing system will optimize profits by focusing on developing a number of product lines with high profit margins, optimizing the business locations, cross-selling the products such as watches, sun glasses, etc; investing in equipment and improving the personnel quality.
Pharmaceutical segment is the growing motivation of FPT Retail in the future. After figuring out the secret to success, the pharmaceutical chain is expected to increase the number of stores by threefold compared to 2019, from 70 to 220 stores right in this year, the revenue will also be increased by 3 times from VND 500 billion in 2019 to VND 1,500 billion in 2020. FPT Retail will particularly focus on investing in technology, which is to build a standard retail platform to pave the way for accelerating new business paths as well as to create momentum for the future growth.
In the immediate future, in 2020, FPT Retail continues to set target of increasing the revenue, maintaining the retail market share of mobile phones, laptops, expanding the coverage of Long Chau system to 220 stores nationwide and developing new business segments.
The new General Director – Mr Hoang Trung Kien was born in 2017, he graduated Master of Business Administration and Information Systems (MBIS) from Université of Libre de Bruxelles (Kingdom of Belgium). Joining FPT in 2000, he has strengths in building, managing the system and developing business with 7 years of experiences in building important information systems for the Government, authorities, and large enterprises in Vietnam; 12 years of experiences in expanding the coverage of telecommunications, which is an intensely competitive field.
With more than 19 years of working for FPT, he has been in many important positions such as Deputy General Director of FPT Telecom (July 2020 – March 2020) where he was in charge of business development of many regions across the country; Deputy Director of FPT Data Center of FPT Telecom (2007), where he managed the service consultancy and deployed the information system; Sales Manager of FPT Software Solutions Company Limited (2004 – 2006).
With high experience in opening and developing new retail chains, Ms Nguyen Bach Diep, Chairman of the Board of Management, will focus on running Long Chau pharmacies and promoting new business segments of FPT Retail. Ms Nguyen Bach Diep was born in 1972, she is the person who has made great contribution in bringing FPT Retail to become the second largest digital retail company in Vietnam. In March 2019, Ms Diep was honored to be in the list of 50 most influential women in Vietnam (According to Forbes Vietnam).
FPT Retail is operating the retail chains, including: FPT Shop, F. Studio by FPT, Long Chau pharmacies together with a number of new lines that are in the testing process. At the present, Long Chau pharmacies have nearly 80 stores nationwide, serving approximately 25,000 consumers a day, the turnover of each pharmacy is 3 times higher than that of other chains. There are 590 stores of FPT Shop, 15 stores of F. Studio by FPT across the country, which help millions of people more convenient in buying technology products.
According to Cafebiz
Published March 7, 2020.
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