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21 May

FPT Retail’s pharmacy stores chain sets turnover target at 500bn VND

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.

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.

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.

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 of 30 USD on pharmaceuticals of each Vietnamese person, etc.

 

According to Phuong Dong, Vnexpress

13 May

The cooperation between FPT Shop and Nguyen Kim in selling televisions, refrigerators, air conditionings, and washing machines, etc.

With the new business in electronics, FPT Shop and The Gioi Di Dong are quite in common when they both sell mobile phones, electronics and medicines.

FPT Shop hợp tác với Nguyễn Kim, bắt đầu bán tivi, tủ lạnh, máy lạnh, máy giặt...

According to FPT Shop’s information, from 11 April, FPT Shop officially cooperated with Nguyen Kim Shopping Center.

FPT Shop revealed that the customers can look up for the products’ information, selling prices, promotions, installments and even make online orders of all the electronic products that are available at Nguyen Kim through FPT Shop’s electronic website. The price policies of FPT Shop is the same as Nguyen Kim’s.

The cooperation with Nguyen Kim will help FPT Shop to have a wide range of products, higher rate of access, which will increase cross-selling capability. Meanwhile, for Nguyen Kim, the sales through a website which has a high rate of access like FPT Shop will help boost their revenue.

Through observation, the products displayed on FPT Shop’s electronic website include air conditionings, televisions, washing machines, cameras, and household appliances, etc.

With the expansion to electronic industry, FPT Shop and The Gioi Di Dong are quite in common, they both sell mobile phones, electronics and medicines. However, FPT Shop has just cooperated with an electronics retailer, while The Gioi Di Dong has already had their own chain.

In reality, The Gioi Di Dong started to sell electronics since 2010, but it was not until the end of 2016, its business began to massively expand. At the moment, Dien May Xanh is the biggest electronic chain in the market with 766 stores gaining revenue of more than VND47,000 billion in 2018.

 

According to Hà My, Cafebiz

13 May

FPT Shop experimented with electronics business, not for the aim of gaining the market share

With the business expansion to the electronics field to take advantage of the online sales, FPT Shop said that the new business is being experimented, hence, they are not thinking about gaining the market share.

Mr. Ngo Quoc Bao, Director of the FPT Retail Center for E-Commerce and Technical Services, told ICTnews that FPT Shop has just experimented in selling electronic products via online channels, the business has not been officially implemented yet, so we now have not planned on how much we will gain the market share in such new industry.

On 11 April, FPT Shop officially launched electronic products on their website. All the electronic products available on FPT Shop’s website are provided by Nguyen Kim, a long-term electronics retailer in Ho Chi Minh City and many other provinces and cities nationwide.

A corner of Nguyen Kim Electronic Appliance Center – Photo: Hai Dang

FPT Shop is ranked second in the mobile phone retail system in terms of the number of chains. The biggest competitor of FPT Shop is The Gioi Di Dong, which has quickly opened a chain of electronics many years ago and is currently holding the largest market share in this segment. Electronics is the closest industry to mobile phones; however at the moment, FPT Shop is new in this industry, therefore they will surely face more difficulties.The new products of FPT Shop are launched also with the aim to increase revenue, in the context of forecasting the growth of mobile phones in Vietnam in 2019 by only about 1%, according to GfK.

“We have been researching this market many years ago and now is the right time”, Mr. Bao replied to ICTnews.

This cooperation is based on the optimal strengths of the two parties, Mr. Bao said, referring to the advantages of e-commerce segment of FPT Shop and a wide range of products as well as experiences in electronic sales of Nguyen Kim.

“The main aim is to take advantage of the optimal strengths, the variety of products, and to provide more special treatments to bring the customers to the main product of FPT Shop, this is not for the aim of gaining the market share”, Mr. Bao replied concerning the target of market share when expanding new business.

The cooperation to open the electronics business of FPT Shop was quite unexpected when such business was not included in the business plan of 2019 in the Annual General Meeting of FPT Retail this year, said the owner of FPT Shop.

In the first phase, electronics will only be sold online and not displayed at FPT Shop stores. Mr. Bao said: “The sales is initially conducted online because online channel is one of FPT Shop’s strengths that our counterparty in this project wants to take advantage of”. “After the process, the systems as well as the ability of coordination of the two parties have been completed, we will have a comprehensive evaluation for further cooperation”.

Before engaging in expanding business to electronic industry, FPT Shop has joined pharmaceutical retail business a few years ago. FPT Retail acquired Long Chau drugstores and planned to gain 30% of the pharmaceutical market share in 2022.

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% compared to 2018. FPT Shop 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

13 May

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.

ĐHCĐ FPT Retail: Dự kiến nâng số lượng cửa hàng thuốc lên 70, hướng đến các tỉnh lân cận TP. HCM

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

13 May

FPT Retail’s pharmacy stores chain sets turnover target at 500bn VND

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

 

8 May

Surprising cooperation between PFT Shop and Nguyen Kim in selling electronics

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

8 May

FPT Retail to give electric appliances a try after pharmaceuticals

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.

Sau dược phẩm, FPT Retail muốn thử nghiệm bán lẻ hàng điện máy - ảnh 1

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.

Sau dược phẩm, FPT Retail muốn thử nghiệm bán lẻ hàng điện máy - ảnh 2

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

8 May

Ms. Nguyen Bach Diep and her bet on Long Chau chain: A pioneer either wins all or loses all

While competitors are still probing the landscape, FPT Retail has already poured all resources into the pharmaceutical retail market. Despite being such a pioneer, Ms. Nguyen Bach Diep dares not making any guarantee she will win.

The FPT Retail’s leadership admitted that the Company was going through a quite difficult and “dangerous” transitional period.

For instance, due to various objective and subjective reasons in 2018, the turnover from Apple products and the expansion speed of the Long Chau chain were lower than expected.

According to FPT Retail’s forecast, the Long Chau pharmacy store chain will bear a loss of 20bn VND in 2018 and the first amount of profit for FPT Retail from this chain would come no sooner than the year 2021. Therefore, they will continue to open 100 new FPT Shops in 2019 to ensure the growth rate above 20%. Moreover, with the newly arrived trend of omni-channel retailing, this is the last time for FPT Retail to open new FPT Shops.

When the smartphone market steps into saturation, pharmaceuticals retail will be the key growth driver of FPT Retail. These are the reasons FPT Retail proceeds to invest resources into the pharmaceuticals retail market while many domestic competitors are still probing the landscape. Despite all the advantages available at hand, Ms. Nguyen Bach Diep , CEO of the Company selects to play it safe, as many always say “whatever will be, will be.”

You expressed high expectations for Apple products at the 2018 AGM of Shareholders, but 2018 was a rather bleak business year of the brand worldwide compared to previous years. Did this affect FPT Shopsturnover?

Ms. Nguyen Bach Diep: Of course it did. The reason why we did not open any new F-Studio in 2018 and mention this section in the Report before this year AGM of Shareholders is that our 2018 turnover was not that high as we expected.

I have never seen such a failure of an Apple new product like in this year. In previous years, the period from November to the first quarter of the year after was our glorious days. It is the other way around for this year. The market of iPhone products consists of 40% hand-carried goods and 60% authentic products. This year’s iPhone XS does not sell well globally, so it came flooding into Vietnam by hand-carried way. This created a vast difference between the price of hand-carried products and the price of authentic products, and redivide the market into shares of 60% hand-carried products and 40% authentic products.

We can only increase the number of F-Studios once we receive better support from Apple in the future.

Market researchers assume that saturation will hit the smartphone market in 3 to 4 years. However, the e-commerce retail section will continue to thrive at galloping speed. What do you think about the relation of these two facts?

Ms. Nguyen Bach Diep: E-commerce and Omni-channel are the popular development trends internationally. Therefore FPT Retail cannot stay out of the game. With widespread chains in large cities, we possess quite many advantages when entering the omni-channel section, as customers love visiting the stores to touch, experience and test products before making a buying decision.

Therefore the online IT goods retail section in Vietnam still has abundant development ground compared to the offline trading section. Omni-channel will help FPT Shops maintain the growth rate.

Of course there can’t be a business model which helps the enterprise grow forever. The market can step into saturation after some years should there be no ground-breaking technology invented similar to what iPhone once did years ago by changing from the mechanical button to the touchscreen technology. That means if the smartphone industry fails to bring in unique technologies, customers will no longer have needs to change devices often.

Being a enterprise specializing in retailing, we understand when our market share reaches a certain number, there will be no more ground for us to grow and we must engage into new sections. A retail company will regard processes, retailing experiences and chain management experience as their business “know how” to be applied into new sections.

Nữ tướng Nguyễn Bạch Điệp và canh bạc Long Châu: Là người tiên phong, thắng làm vua thua thì làm giặc - Ảnh 1.

Omni-channel retail is the inevitable trend in modern retail, in which information infrastructure, apart from the human factor, plays a critical role for success or failure of a enterprise employing this model. With FPT – a giant in Vietnam’s IT industry – being a significant shareholder of FPT Retail, what advantages does FPT Shop have against competitors when entering this game?

Ms. Nguyen Bach Diep: The FPT Group, a significant shareholder of FPT Retail, is a long-standing technology enterprise of Vietnam. Mr. Truong Gia Binh, FPT’s President, usually recommends that “FPT Retail operate as a retailer not a merchant chasing too often after pennies. It is advisable to get rid of the traditional ways and apply information technology into both fields of governance and business operations.”

Therefore, all member companies gets support from the technology board of the group. Of course we have to give “problems” for them to solve, they cannot do everything for us. For instance, the chatbot and customer visit counter technologies being in use at every shop were developed by the Board of Technology of the group.

After trying 3 to 4 different versions, FPT Shop embedded the integrated chatbot technology into their forums and website last year. FPT Shop’s chat bot can now answer 75% of users’ questions. Many users did not know that was the chatbot, because the chatbot generates very fast and accurate answers.

At each store, we also use a customer visit counter to know when is the most or least crowded time of each shop in order to coordinate service staff reasonably, which ensure enough service staff members to serve customers.

The two technologies above helps us vastly optimize our personnel, cut down costs and enhance competiton capabilities against competitors.

With the omni-channel trend, many retailers – even in the smartphone retail section – stopped opening new stores or decrease the number of stores to focus on online trading. Why FPT Shop goes on to open 100 new shops in this year?

Ms. Nguyen Bach Diep: I think the offline stores will still do well after 3 to 5 years to come. Therefore our opening new shops in 2019 brings no problems. From now to the end of this year, however, FPT Retail will not open any more FPT Shop while focusing in the pharmaceutical retail section.

The truth is we have closed or opened dozens of stores every year, what’s important is we close less than we open new ones.

Nữ tướng Nguyễn Bạch Điệp và canh bạc Long Châu: Là người tiên phong, thắng làm vua thua thì làm giặc - Ảnh 2.

After 2019, FPT Retail will not open new mobile phone shops.

It is said the Long Chau pharmacy store system is about to change its name. Is that correct, Madam?

Ms. Nguyen Bach Diep: Previously in Ho Chi Minh City, Long Chau chain was quite well-known. Therefore we want to keep the brand name.

As for the newly opened stores, after the license for establising FPT Pharma takes effect, i.e. from January till now, there is the name FPT on store signs apart from the name Long Chau. We do not change our name, but we add in the name of a significant shareholder.

Why does FPT Retail choose the pharmaceutical retail section and the Long Chau chain to expand its fields of business? What is the current status of Long Chau chain?

Ms. Nguyen Bach Diep: When we were seeking new sections several years ago to expand our fields of business, we discovered potentials of the pharmaceutical retail section as its market were worth 4.5bn USD – equivalent to the smartphone retail section and there was no market leader to guide the market.

Each Long Chau store brings in about 3bn VND per month, while many stores of other chains reaches only 200 – 600 bn VND.

After that, we chose the Long Chau chain from a list of numerous retail chains because we were very impressed by the turnover of about 3bn VND/month each Long Chau store brought in, while a store of a different chain lies between 200mn and 600mn VND.

I cannot name enough reasons why Long Chau was such a “success”, as that is our business secret, but I can state some obvious details: Each Long Chau store has a humongous amount of medicines and functional food, which helps with catering for any customer’s needs.

After a year since implementation, we can disclose some outlines of FPT Pharma’s current status as follows: Each Long Chau store brings in an average monthly turnover of 1.6bn VND and reaches breakeven or profit after about 6 months. Before that, in every month we had to mobilize hundreds of millions of products with coming expiry dates. With technology in use, for each month we only need to mobilize dozens of millions of products with coming expiry dates.

Long Chau does sell special medicines, sell according to prescriptions and fill the customers’ requirements for minor ailments. However, our biggest turnover comes from the second source together with 4 main types of cardiovascular diseases – dyslipidemia/diabetes – mental illness – arthralgia. Of all the sections, the functional food has the highest profit margin.

Nữ tướng Nguyễn Bạch Điệp và canh bạc Long Châu: Là người tiên phong, thắng làm vua thua thì làm giặc - Ảnh 4.

I cannot name enough reasons why Long Chau was such a success, as that is our business secret

Why FPT Retail opened only nearly 20 Long Chau stores in 2018?

Ms. Nguyen Bach Diep: The first reason was we needed to find a right formula for opening new stores before doing a series of stores.

In 2018 we opened pharmacy stores at various locations to see which locations are most ideal for optimizing turnover and profit. For instance, the location inside FPT Shop with the advantage of no additional location costs or the location near markets, hospitals or crowded residential areas, etc. We have found the right formula for Ho Chi Minh City so we were confident to open a series of new stores.

In the future we will open stores in Bien Hoa of Dong Nai province, My Tho of Tien Giang province and have to keep on experimenting due to differences between provincial and Ho Chi Minh City markets.

Moreover, our team of location hunters underwent chaotic changes in 2018, hence the lower performance compared to the previous period. Things have settled down now so we are confident about opening new Long Chau stores as fast as planned to the number of 70 in 2019 and 700 in 2022.

According to you, the pharmaceuticals retail market has no leader for now. Not only FPT but also other players include Mobile World and Vingroup, etc. realize that. However, FPT, among those players, seems to be keenest on this section. While other competitors still refrain from going in full force, FPT has already opened stores after stores. It seems FPT is a step ahead of other competitors, doesn’t it?

Ms. Nguyen Bach Diep: Being a step ahead has disadvantages, though, the pioneer may win all or lose all. When a pioneer performs well, we are going to have a very big customer data file, which can be used for easy imprinting the brand name into customers and earning their trust. However, a pioneer also faces many risks on an untrod path, including accidents, a wrong turn resulting in a very dear price or even complete failure.

A follower has advantages a pioneer do not, for instance, the case of FPT Shop. Despite having been in the field for only 6 years, we have achieved great results thanks to learning from numerous mistakes made by enterprises in the same industry such as Mobile World, Viettel Shop and Vien Thong A, etc. The follower pays lower costs and goes faster.

Nữ tướng Nguyễn Bạch Điệp và canh bạc Long Châu: Là người tiên phong, thắng làm vua thua thì làm giặc - Ảnh 5.

Then do you believe Long Chau will win?

Ms. Nguyen Bach Diep: It’s hard to be certain about anything in business, but we believe in our direction after a while of experimenting and vigorously investing into the field.

Where are you at in pharmaceutical knowledge?

Ms. Nguyen Bach Diep: I understand the rules of operation and basic knowledge, but I can’t know all details of each medicine as Long Chau has a tremendous list of 6,000 products.

The important thing is that it takes only management capabilities to run the 2 chains of FPT Shop and Long Chau, despite the differences between the two sections, because of the similarity of 90% of work in running a trading chain model. For me, running Long Chau does not differ much from managing FPT Shop.

Thank you!

 

According Cafe F và Cafe Biz

2 May

FPT Retail and 1001 selling tactics to keep its growth rate at 20%: Boosting selling on credit and sales of accessories and SIM cards, testing 3 new projects concurrently

In order to maintain the 20% growth rate of profit after tax in the context of market saturation for mobile phones and Long Chau pharmacy store chain’s continued loss, FPT Retail employs numerous selling tactics to attract customers.

Áp lực tăng trưởng đẩy FPT Retail xoay sở 1001 phương án bán hàng: Tăng bán trả góp và bán sim thẻ phụ kiện, thử nghiệm cùng lúc 3 dự án mới

After 6 years of impressive growth thanks to being a follower, FPT Retail starts to face the other side of the coin. Upon the Company’s completion of its system chains build-up, the market stepped into saturation, which then pushed FPT Retail, a follower with no other choice, into quick hurdles of developing other retail sections in order to maintain the annual 20% growth rate of profit.

Similar to other retail chain businesses, the Company’s situation dictated a priority of market expansion over profit in the beginning. Therefore, the Long Chau pharmacy store chain will bear a 20bn loss in 2019 and only begin to profit from 2021 onwards as stated in the report of FPT Retail’s leadership in the Annual General Meeting of Shareholders held this morning of March 27.

In order to help FPT Retail safely go through the pivotal ahead, the leadership proposed many familiar yet creative selling tactics to help the Company maintain its 2-digit growth rate of both turnover and profit.

FPT Shop and 1001 selling tactics

In 2018, FPT Retail recorded a total turnover at 15,298 bn 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 348bn, up by 20% compared to 2017.

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.

According to the plan, this year will see FPT Retail boosting the implementation of F-Friend and Subsidy programs apart from increasing customer traffic both online on the website and offline at shops. These two sections are expected to bring in 1,875bn compared to 1,575bn in 2018.

In 2018, FPT Retail’s F-Friend program had 1 million blue collar customers from 2,500 factories. This year the Company will focus more on reaching white collars – office staff workers – from commercial and service enterprises. As for the Subsidy program, the Company plans to cooperate with Vinaphone, Mobifone and Vietnam Mobile in 2019 to jointly sell mobile phones accompanied by preferential service plans.

According to Ms. Nguyen Bach Diep, CEO of FPT Retail, there are two sections with abundant development ground for the Company: upgrading products through selling on credit and selling accessories and SIM cards.

The turnover from credit-based selling currently accounts for only 32% in FPT Shops’ total turnover, while the ratio is up to 50% at other enterprises in the same industry. The credit-based trading will contribute 45% in FPT Shops’ total turnover in 2019. In order to control bad debts, FPT Retail will utilize various technologies to evaluate more accurately customers’ financial capabilities and credibility points.

The section of phone accessories and SIM cards at FPT Shops has long been overlooked by FPT Retail, while this section is highly profitable. Therefore, FPT Retail sets the target turnover of 1,000bn VND from selling phone accessories and if things go as planned, the profit will be about 100 bn, up by 67% compared to 2018.

The impressive figures stated above are thanks to FPT Retail’s thorough preparation for “The 1,000bn campaign” after negotiating with overseas suppliers, which lowers the import price by 20% compared to previous prices. On that ground, despite selling at very competitive prices, FPT Retail can still achieve a 10% profit compared to previous prices.

With such 1001 selling tactics being implemented in 2019, it is obvious the Company is striving to satisfy every need of consumers from all social classes. Customers can always find items they need in FPT Shop.

Long Chau is a story of the future

Long Chau pharmacy store chain has 22 stores, 20 of which are located in Ho Chi Minh city and Bien Hoa. However, the turnover of the chain is not accounted in the total turnover in 2018.  In 2019, FPT Retail will open 50 new stores in Ho Chi Minh City as well as many other provinces nationwide. The turnover from these will be about 500bn VND, while loss is expected to be about 20 bn VND.

According to Ms. Nguyen Bach Diep, Long Chau is a story of the future. In the plan presented at the General Meeting of Shareholders, the number of stores will rise to 217 in 2020 and 700 in 2022. Accordingly, Long Chau chain will break even in 2020, make a profit of 62 bn VND in 2021 and 193bn VND in 2022.

Being a new player in the pharmacy retail industry, FPT Retail experimented various business models in 2018 with a focus on locations which can attract most customers once the store is opened. They have discovered the right model, hence the bold acceleration of market expansion.

Also according to Ms. Diep, if the development of Long Chau pharmacy store chain gets into orbit in the time to come, FPT might as well embark on pharmacy distribution and manufacturing industries.

3 projects in test

For the time being, FPT Retail’s two main retail sections are electronic devices and pharmaceuticals. However, they do not limit themselves in those sections only. As Ms. Diep has shared, this Company will invest into any retail section with high profit.

FPT Retail is currently cooperating with partners to test 3 projects simultaneously, which will be made public once experimentations prove successful. However, the CEO would not disclose which retail section.

 

According to Linh Dan, Cafebiz

2 May

AGM of Shareholders of FPT Retail: Number of Long Chau pharmacy stores can be small, but they achieve 3bn VND of turnover each month, tenfold that of ordinary stores

After 2018, FPT Retail has figured out a model and formula for opening a new store and planned to open stores in provinces neighboring Ho Chi Minh City. As for competitive capacity of Long Chau pharmacy store chain, Ms. Nguyen Bach Diep said:  “The number of Long Chau pharmacy stores can be small but each achieves 3bn VND of monthly turnover on average, while an ordinary store can do only 300-400mn per month”.

In the morning of March 27, FPT Digital Joint Stock Company (FPT Retail, FRT) held its AGM of Shareholders of 2019 in order to announce the planned turnover of 17,700bn VND and profit after tax of 418bn VND with increasing rate of 16% and 20% respectively compared to 2018. From such targets above, the Board of Management set the target dividend in cash at no lower than 10%.

On preliminary business results of the first 3 months of 2019, the Company says the iPhone section results strongly affected bottom lines of the first 2 months of the year. FPT Retail is currently researching to engage in new sections and seeking for more partners.

Back to the meeting this morning, a large part of contents in discussion focused on how to increase profit by 20% in 2019? And the anticipated time when Long Chau pharmacy store chain stops loss?

Long Chau pharmacy chain to expand to 70 stores in 2019

Addressing the shareholders at the AGM, FPT Retail leadership stated that the 2019 plan would expand into retail sections with pharmacy being on top of the list. According to the plan, the Company would expand the Long Chau pharmacy store to 70 stores and increase coverage nationwide.

According to the Company’s representatives, the pharmacy 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. The Company would accordingly focus on building logistics, increasing the number of stores and developing a staff with suitable management and professional capabilities.

In Vietnam, the pharmacy 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. Accordingly, the pharmacy retail section is anticipated to contribute about 40% in FPT Retail’s expected turnover of 10,000bn VND. The potential turnover of FPT Retail is 4.5bn USD without the pharmacy retail section, despite the saturated mobile phone retail section.

As an answer for shareholders’ question “When will Long Chau stop loss?” the leadership informed that the breaking even of a pharmacy store has not yet been recorded accurately so far. Stores in Ho Chi Minh city has quite stable business results without any store breaking even later than 6 months. Since engaging into the new business section in 2018, FPT Retail has tested if this model was effective, which informed the Company on locations with good turnover. Moreover, the Company has dedicated an area inside FPT shops to run Long Chau pharmacy stores. As for the question of loss or profit, FPT Retail’s representatives stated that the time of breakeven depends on the shop type.

After 2018, FPT Retail has figured out a model and formula for opening a new store and planned to open stores in provinces neighboring Ho Chi Minh City. As for competitive capacity of Long Chau pharmacy store chain, Ms. Nguyen Bach Diep said: “The number of Long Chau pharmacy stores can be small but each achieves 3bn VND of monthly turnover on average, while an ordinary store can do only 300-400mn per month.

Online selling to be boosted

Secondly, as for phone accessories and SIM cards, FPT Retail sets turnover targets for 2019 of accessories at 1,000bn VND, up by 350bn VND, while the collection SIM cards section is expected to increase by 100bn VND. These will be strategic sections contributing into turnover and high profit for FPT Retail in 2019.

The Company will put a special focus on boosting online selling. In the face of the e-commerce boom, FPT Retail will offer numerous promotional and discount programs to best fit 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 and trendy products expected to sell well.

Does FPT Retail cross-sell products as Mobile World?

At the general meeting, FPT Retail stated that each line of business needed research on future potentials, there were a series of projects on trial run by FPT Retail, the investments of which would be announced once highly successful results have been reached.

The Company is in negotiation with partners. FPT Retail aims to limit saturated areas and give room for better new areas. For instance, accessories prices of the Company in the past were higher than those of other sellers. Therefore FPT Retail began turning toward working with importers, which cut down prices by 20%.

Moreover, the Company improves the process effectiveness of F.Friends Project in way of further improving and applying many technologies in the process of approving and managing customer files and risks. Furthermore, FPT Retail will 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.

After re-activating the F-Friends 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.

As for details of the F.Friends program, the Company’s representatives said that the F.Friends program 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. Normal customers buying on credit may get rejected due to ineligibility or there are products not to be paid on credit at the interest rate of 0%. This means more professional buying compared to normal buying on credit.

ĐHĐCĐ FPT Retail: Số lượng nhà thuốc Long Châu nhỏ nhưng doanh thu đạt 3 tỷ đồng/tháng, gấp 10 lần cửa hàng thông thường - Ảnh 2.

The general meeting this morning also approved of the dividend payment plan for 2018 at the payout ratio of 25%, of which 10% is in cash and 15% in shares. Dividends are scheduled be paid in the period from the 2nd Quarter to the 3rd Quarter this year. After issuing of shares as dividend payment, the charter capital of FPT Retail will rise to 790bn VND. Moreover, the Company also approved the plan ò issuing 680,000 ESOP shares at 10,000 VND per share. Half of the newly issued shares will be restricted from transfer for one year starting from the completion date of ESOP shares issuance. Members of FPT Retail’s Board of Management and Board of Directors continues to receive no remunerations in 2019.

On the basis of above points, FPT sets the target of a 20% rise in profit in 2019.

At the end of 2018, FPT Retail recorded total turnover at 15,298 bn VND, which is a up by 16% compared to 2017. Turnover from online trading reached 2,432 bn, which recorded a rise by 21%. Profit before tax reached 435 bn and profit after tax reached 348 bn, up by 20% compared to 2017.

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 423 bn in FPT Retail’s total turnover, up by 61% compared to the same period of 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 2.4 bn/month, with a slight increase compared to 2017.

 

According to Tri Tuc, CafeF