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16 Jul

FPT Shop most engaging brand on Facebook in Vietnam: report

A store of FPT Shop in the northern city of Hai Phong. Photo courtesy of FPT Shop.

FPT Shop under FPT Retail, Vietnam’s second largest electronics retailer, has topped the list of 10 brands garnering the most interactions on Facebook.

FPT Shop’s fanpage recorded a total of 7.3 million interactions on Facebook in the first half of 2020, followed by Lazada Vietnam (6.4 million) and Shopee Vietnam (5.2 million), according to a report by Prague-based social media marketing company Socialbakers.

The fanpage of food review and delivery startup Foody Vietnam ranked fourth with a total of 4.9 million interactions.

Socialbakers said in its report that “The global Covid-19 pandemic clearly shows the importance of launching social media campaigns to contribute to improving business efficiency.”

Facebook is the most popular social media network in the country of 96 million people. Vietnam ranked a global seventh in number of Facebook users with 58 million, or 75 percent of the population aged 13 or more, according to a report released last year by U.K. advertising agency We Are Social.

According to Hoang Phong, VnExpress

Published July 14, 2020

24 Jun

2020 is the year when FPT Retail is at the bottom of business, the Company is ready for new products

2020 is the year when FPT Retail is at the bottom of business

On 28 May afternoon, FPT Digital Retail Joint Stock Company (FPT Retail, HoSE: FRT) held the General Meeting of Shareholders of 2020. In 2020, the Company sets the target of VND 15,320 billion of revenue, down by 8%, and VND 220 billion of profit before tax, decreased by 21%.

In 2019, FPT Retail’s revenue was increased by more than 5% to nearly VND 17,000 billion, and profit before tax, decreased sharply by 36% to VND 278 billion. According to the Chairman of the Board of Management Ms. Nguyen Bach Diep, such result was because at the end of last year, the Company made provision for bad debts for 2 programs, F.Friend and Subsidy for loyal customers, and also handled the accessories inventories, promoted the investment for Long Chau pharmacy and information technology system.

According to the leader, for the plan in 2020, the Company has taken the impact of Covid-19 pandemic and the closing of stores in April due to social distancing into account. The bright spot during that period was the online sales witnessed a significant increase, which contributed 50% to the total revenue, compared to the rate of 25% before.

Regarding FPT Shop chain, its revenue is expected to be down from VND 16,123 billion to VND 13,820 billion due to the intentional decrease of revenue of F.Friend and Subsidy programs. Because there is a down sign in the number of visitors, the Company has determined to increase the successful rate and average value of the orders, as well as expand customer groups.

In terms of Long Chau chain, the Company plans to open 150 new stores to increase the number of stores to 220 at the end of the year; accordingly, it is anticipated that the revenue will rise from VND 500 billion to VND 1,500 billion. The Company will also promote the development of products with private labels such as functional foods, medical equipment, pharmaceuticals and cosmetics, etc.

With the target of VND 220 billion of revenue in 2020, Ms. Diep considered that was the bottom of business of the Company. The Company also intends to increase the accessories portfolio, along with reduce the costs such as investing in security cameras in order to save VND 30 billion of cost every year, requesting to increase the business productivity to 25%, etc.

For the plan in 2021, FPT Retail sets the target of VND 18,573 billion of revenue (VND 3,000 billion from Long Chau, in particular) and VND 250 billion of profit before tax. In 2022, the Company aims to achieve VND 21,827 billion of revenue (VND 4,500 billion from Long Chau, in particular) and VND 370 billion of profit.

Revenue in the second quarter may be decreased by 15 to 20% compared to that of the previous quarter

Assessing the impact of Covid-19, Ms. Diep said that the business results have been affected from the end of March. Particularly, in April, the Company had to close about 170 stores, equivalent to one-third of FPT Shop chain. Although the stores have reopened, Ms. Diep assessed that the people’s income had been affected, thus, the demand for non-necessities reduced, which resulted in the fall of revenue in the second quarter by 15 to 20% compared to that of the previous quarter.

Regarding the cost reduction, the Company also asked for adjustment of the premise rental from the owners and it was approved with a period of about 3 months (from April to June).

Currently, private pharmacies need a pharmacist in their name so that they can be put into operation, but for a pharmacy chain like Long Chau, there is no legal problems in the procedures when the Company is the entity that owns that pharmacy chain, the pharmacist is only for professional value.

The Chairman of FPT Retail also emphasized that the investment in Long Chau is at an early stage, so the chain has not reached the break-even yet. The initial investment for the pharmacies depends on size but it may range from VND 400 million to VND 1 billion. Ms. Diep expected that by 2022, the chain can break even on an EBITDA basis.

Long Chau is expected to break even in 2022

Ms. Diep also admitted that there had not been any substitutes to ensure the growth of the Company. Drawing from that lessons, the Company has started to research on new business segments in order to ensure the growth when the pharmaceutical business comes into saturation stage like FPT Shop today.

Another leader of FPT Retail shared that the Company already has significant resources with 600 premises, stable customer volume and qualified personnel, which can easily help the Company to start with new suitable products. The current business lines that are in interest are selling air tickets, insurances or testing beauty products (FBeauty), etc.

At the moment, the aviation market is developing rapidly and the number of tickets is about 50 million units per year. FPT Retail’s leaders estimated that about 20% of air tickets are sold via corporate channel, 10 to 15% via online channel and the majority of 50 to 60% via retail agents, which is a huge market for the Company to exploit.

The Meeting also approved the appointment of an independent member of the Board of Management in place of Mr. Hoang Trung Kien. The nominated person was Mr. Nguyen Dac Viet Dung, whose date of birth was on 4th August 1974. Mr. Dung is currently the Chairman of the Board of Management of Sendo, it is expected that he will promote the development of FPT Retail’s online segment.

The Company also passed the distribution plan of dividends paid by cash with the rate of no more than 10% of 2019. The estimated timeline is in the third quarter. For 2020, FPT Retail sets the target that rate of dividends paid by cash will not exceed 15%.

According to Huy Le, NDH

Published May 28, 2020

24 Jun

FPT Retail’s General Meeting of Shareholders: Ready for new products

On 28 May afternoon, FPT Digital Retail Joint Stock Company (FPT Retail, stock code: FRT) held the General Meeting of Shareholders of 2020

In 2019, FPT Retail’s revenue was increased by more than 5% to nearly VND 17,000 billion, and profit before tax, decreased sharply by 36% to VND 278 billion. In 2020, the Company sets the target of VND 15,320 billion of revenue, which is down by 8%, and VND 220 billion of profit before tax.

Such result in 2019 was because at the end of last year, the Company made provision for bad debts for 2 programs, F.Friend and Subsidy for loyal customers, and also handled the accessories inventories, promoted the investment for Long Chau pharmacy and information technology system. For the plan in 2020, the Company aims to decrease its target because of the impact of Covid-19 pandemic and the closing of stores in April due to social distancing.

Regarding FPT Shop chain, its revenue is expected to be down from VND 16,123 billion to VND 13,820 billion due to the intentional decrease of revenue of F.Friend and Subsidy programs. The Company has determined to increase the successful rate and average value of the orders, as well as expand customer groups.

In terms of Long Chau chain, the Company plans to open 150 new stores to increase the number of stores to 220 at the end of the year; accordingly, it is anticipated that the revenue will rise from VND 500 billion to VND 1,500 billion. The Company will also promote the development of products with private labels such as functional foods, medical equipment, pharmaceuticals and cosmetics, etc.

Moreover, the Company also intends to increase the accessories portfolio, along with reduce the costs such as investing in security cameras in order to save VND 30 billion of cost every year, requesting to increase the business productivity to 25%, etc.

For the plan in 2021, FPT Retail sets the target of VND 18,573 billion of revenue (VND 3,000 billion from Long Chau, in particular) and VND 250 billion of profit before tax. In 2022, the Company aims to achieve VND 21,827 billion of revenue (VND 4,500 billion from Long Chau, in particular) and VND 370 billion of profit.

The General Meeting has approved the appointment of Mr. Nguyen Dac Viet Dung as an independent member of the Board of Management. The dividends of 2019 were approved at the rate of 10%. For 2020, FPT Retail expects the rate of dividends paid by cash will not exceed 15%.

According to VnReview

Published May 28, 2020

24 Jun

FRT’s General Meeting of Shareholders: ICT revenue will be decreased by more than 14%, while that of Long Chau pharmacy chain is expected to be increased by threefold to VND 1,500 billion

According to FRT, the Company has been affected by Covid-19 since March and in April, 170 stores closed, equivalent to one-third of FPT Shop’s total national scale, which has caused an impact on the whole business activities. After the social distancing was released in May, the stores were opened, however, the consumers’ demand is affected, their income was reduced, thus, the purchasing power and demand for non-necessities decreased. According to the preliminary forecast, the revenue of the second quarter may be down by 15 to 20% compared to that of the first quarter of 2020.

On 28 May afternoon, FPT Digital Retail Joint Stock Company (FRT) has held the Annual Meeting of Shareholders of 2020, approving the business plan in which the revenue will be decreased by 8% to VND 15,320 billion, profit before tax of VND 220 billion, down 21%. With the above target, the Company suggested that dividends in 2020 will be paid by cash with the rate of no more than 15%.

In 2020, the Board of Director aims to maintain the growth of ICT segment. This is also a fulcrum for FRT to invest in new business strategies. FRT plans to increase the turnover of the store chain by introducing sun glasses and watches under shop-in-shop model.

In contrast, after discovering the secret to success for the pharmacy chain, the Company will focus on investing, expanding the scale to 220 stores and increasing its coverage nationwide. The Company will also promote logistics. Long Chau chain has reached the milestone of 100 stores, and has decided on 40 locations to open new stores in the second quarter of 2020.

In the second quarter of 2020, the revenue is anticipated to be decreased by 15 to 20% due to Covid-19

Regarding the effect of Covid-19, Ms. Diep said that in general, the first quarter of 2020 was quite better than the fourth quarter of 2019, thanks to the favorable business index of the first 2 months.

Since March, the Company has been affected by Covid-19 and in April, 170 stores closed, equivalent to one-third of FPT Shop’s total national scale, which has caused an impact on the whole business activities. After the social distancing was released in May, the stores were opened, however, the consumers’ demand is affected, their income was reduced, thus, the purchasing power and demand for non-necessities decreased.

According to the preliminary forecast, the revenue of the second quarter may be down by 15 to 20% compared to that of the first quarter of 2020.

The new General Director, Mr. Hoang Trung Kien: “What am I going to do in my new position?”

In the opening speech, Mr. Hoang Trung Kien – the new General Director shared that: “In the new position, I understand that everyone is wondering what the new leader will do in order to bring value to the Company, the customers and shareholders. FRT’s strategy is to become to leading multidisciplinary retailer of Vietnam in the next 3 years. We will diversify the digital products, expand the scale under shop-in-shop model”.

Moreover, FRT will also stimulate the development of Long Chau chain after discovering the secret to success. In 2020, FRT plans to reach 220 pharmacies.

Lastly, according to Mr. Kien, FRT will seek for new business lines where the Company can promote retail chain management experience as well as experience in managing digital technology industry.

“I am also thinking on the next question is what I am going to do for that strategy. I always have in mind that I will contribute all of my capacity, by focusing on 3 things:

Firstly, technology, in order to improve the efficiency;

Second, personnel, in order to nurture and build key leadership force for the near future. With the expansion pace of the chain, the leadership enhancement is urgent;

Lastly, focusing on improving the culture and core values for the Company”, said the new General Director.

In 2019 – online sales were increased by more than 60% to VND 3,899 billion, contributing up to 24% to the Group’s total revenue

By the end of 2019, total assets were increased to VND 6,594 billion, the revenue was VND 16,634 billion, profit after tax was reduced by 41% to VND 204 billion, in which, online sales were increased by more than 60% to VND 3,899 billion – contributing more than 24% to the total revenue. Revenue of offline sales was nearly unchanged during the period, contributing 70% to the total revenue with VND 11,324 billion.

The turnover of 2 programs F-Friends and Subsidy witnessed a sharp decrease, which resulted in the fall of the Company’s turnover. The turnover of F-Friends was VND 800 billion in 2019, down 1.4%; that of Subsidy was VND 100 billion, which was deceased by more than 85% compared to that of the same period in 2018 (in 2018, VND 764 billion).

The profit of 2019 was affected by the system, which made the Group have to handle bad debts for 2 programs F-Friend and Subsidy. In addition, in accordance with the orientation of importing international accessories to increase the profit margin, in 2019, the Company must liquidate all domestic accessories

Finally, FRT also promoted the investment to speed up the opening of Long Chau, as well as the development of the information technology system (in order to reduce costs, increase benefits for the customers, etc.) in order to increase the operating capital.

In 2020, Long Chau chain anticipates to increase its revenue by threefold to VND 1,500 billion

In terms of the plan for 2020, Ms. Nguyen Bach Diep said that the Company will draw lessons from the previous year, for instance, reducing the investment in 2 programs F-Friends and Subsidy. Concurrently, due to Covid-19, the Company anticipates that the revenue will be reduced by 8%, profit before tax, by 21% down to VND 220 billion.

To be specific, the Company plans to reach the target of VND 15,320 billion of revenue in 2020, ICT segment will contribute VND 13,820 billion – down by more than 14% compared to that of last year (in 2019, the revenue was VND 16,100 billion). In contrast, for Long Chau chain, its revenue is expected to be increased dramatically by threefold from VND 500 billion (2019) to VND 1,500 billion. Long Chau chain also plans to reach 220 stores. Long Chau will expand its product portfolio, especially private label products such as functional foods.

 “Covid-19 scenario has been taken into account when calculating this figure”, the Company’s Chairman said. There was a bright spot in Covid-19 pandemic, Ms. Diep emphasized, on average, online sales contributed about 25% of the total revenue, while in the pandemic, the proportion rose sharply to 50%.

In 2020, FRT will also record results from cost-saving activities, such as installing cameras at stores to minimize the recruitment of security guards.

In addition to the trading of accessories, in 2019, there was a significant increase of profit with the growth rate of 26% (but still not reaching the target of increasing by 50% compared to 2018). Accordingly, accessories and digital sims continue to be the goal to improve the profits of 2020, the plan of the previous year has not been completed, so the Company will maintain the target of VND 1,000 billion of revenue from accessories and 1 billion sims.

By the end of the first quarter of 2020, there was a slight increase in the Company’s revenue to VND 4,141.5 billion. After deducting expenses, FRT recorded VND 35.6 billion of gross profit – which was decreased nearly by double compared to the first quarter of 2019.

According to the Company’s explanation, the gross profit plummeted due to Covid-19 pandemic, which also caused the factories in China to cease operating. Thus, the revenue of the first quarter of 2020 was decreased by VND 163 billion compared to that of the same period.

In addition, the first quarter was the time when the rental was increased periodically, and at the same time, FRT distributed salaries according to actual results, which led to a signigicant increase in management and sales cost.

Regarding the Board of Management, on 6 March 2020, Mr. Nguyen The Phuong had a resignation letter from the position of member of the Board of Management. After Mr. Hoang Trung Kien holds the position of General Director, he will no longer be an independent member of the Board of Management. Accordingly, the Company has elected Mr. Nguyen Dac Viet Dung as an independent member of the Board of Management.

According to Tri Tuc, CafeF

Published May 28, 2020

24 Jun

FRT’s General Meeting of Shareholders: Encroaching on “self-made products”, Long Chau chain plans to reach the revenue of VND 1,500 billion

At the General Meeting of Shareholder of FPT Digital Retail Joint Stock Company (stock code: FRT), which was in this afternoon, Ms. Nguyen Bach Diep, Chairman of FRT’s Board of Management, said that Long Chau chain aims to increase its revenue by triple to VND 1,500 billion, which is by expanding the number of stores to 220 in 2020. And Long Chau is also promoting the development of “self-made” products of functional foods, medical equipment, pharmaceuticals and cosmetics. In the second quarter of 2020, FRT’s revenue may be decreased by 10 to 15% due to Covid pandemic.

Sharing at the General Meeting, Ms. Diep said that in the first quarter of 2020, FRT achieved quite good results compared to the fourth quarter of 2019, however, in the second quarter of 2020, the revenue could be reduced by 15 to 20% compared to the first quarter. Due to the impact of the Covid pandemic, one-third of the total number of FPT Shop, equivalent to 170 stores, closed and although opened in May, the consumers’ demand still sharply decreases.

However, during the closing, FRT asked for the adjustment of the rental price and also acquired approval. The duration of the discount is 3 months, from April to June of 2020. This is a great support for the overall business results of the Company.

In 2020, the revenue of the pharmacy chain grows while that of FPT Shop chain decreases

In 2020, FRT plans to achieve VND 15,320 billion of revenue and VND 220 billion of profit before tax, down by 8% and 21% respectively compared to the initial target of 2020.

Regarding the revenue structure, Ms. Diep said that after assessing the impact of the Covid pandemic, FRT set a target of VND 13,820 billion of revenue from FPT Shop chain, while that in 2019 was VND 16,100 billion. And in 2020, the Company will proactively minimize the flaws and weaknesses of F-Friends and Subsidy in 2019, which will also affect the Company’s revenue.

“2020 can be considered the year when FPT retail system is at the bottom,” Ms. Diep said.

In order to achieve the above revenue target, according to Ms. Diep, the Company will continue to promote online sales for FPT Shop chain. In the previous pandemic, online revenue has contributed up to 50% to the Company’s total revenue, while on average, it was 25%.

Besides the common difficulties in the market, the decline in non-essential needs and the flow of visitors at store will affect FRT in achieving its target of exploiting sales opportunities.

Ms. Diep took a specific example, if in the past, we could only successfully reach the deal with 3 out of 10 visitors, now our goal is to successfully reach the deal with 5 visitors. At the same time, we will boost the average value of the invoices, for instance, on average, an invoice of a customer is at VND 5 million, now we will try to stimulate their spending, to VND 7 million by instalment payment policy, for example.

Moreover, the Company will diversify the customer group instead of passively waiting for the customers to come to the stores, to be specific, the Company will cooperate with Mobifone, DH FPT, or FPT Telecom.

For Long Chau chain, the significant increase in its revenue is due to the continuing expansion of stores

“Long Chau’s gross profit margin is higher than that of mobile segment, by nearly 3%. However, this is just the beginning, after the investment period, dominating the market, reaching a stable scale, negotiating with the firms, and implementing the strategy of self-producing some products will definitely improve the profit margins,” said Ms. Diep.

Regarding the expansion of Long Chau chain in a time when the Company has not yet generated profits from this segment, along with large debts and being affected by the Covid pandemic, Ms. Diep said that opening a new business chain requires investment and losses at the start. The important thing is when the number of new stores opened is less than the number of existing stores, will come the chance of break-even.

Besides that, when the scale is large enough, the ability to negotiate with the landowners will have an effect. In addition, the ability to manage the cost of deploying back-office teams to support the business teams will be more optimal, and gradually it will become fixed costs.

“The same story happened for FPT Shop, it used to incur losses for 2 to 3 years during its expansion. However, in the following years, it has been growing very quickly”, Ms Diep said, “For Long Chau pharmacy, it will break even and gain profits after 6 months”.

Sharing at the General Meeting of Shareholders, the Chairman of FRT said that stabilizing the cash flow is also a key goal of the Company, thanks to the cash flow from 600 FPT Shops (with no current expansion plan), the optimal management of inventories, negotiation with the suppliers on time of delivery and term of payment.

Regarding to target of reaching VND 220 billion of profit, Ms. Diep said that the Company will try efforts to achieve VND 1,000 billion of turnover from accessories (in 2019, only VND 800 billion). FRT expects the investment in technology improvement in 2019 will help optimize the costs in 2020.

New business line expansion

Mr. Hoang Trung Kien, General Director, said that FRT is oriented to become the leading multidisciplinary retailer in Vietnam in the next 3 years, through the diversification of digital lines and the development of shop-in-shop model. At the same time, the Company will continue to focus on investing in Long Chau pharmacy chain after finding its secret to success in 2019.

Currently, FRT and the Board of Directors of Long Chau has proceeded the expansion, in the past week, it is declared that there have been 100 stores nationwide. In 2020, Long Chau chain aims at reaching 220 stores.

Simultaneously, FRT is also seeking for new business chances, new business lines to promote existing experience such as retail chain management, technology-based management, customer service experience, etc. In the reports to the Meeting, the content of supplementing new business lines is for the purpose of preparing for this goal.

“These are the motivations for FRT in the next 3 years”, said Mr. Kien.

 

In 2019, FRT has to make provision of approximately VND 100 billion to handle bad debts

In 2019, FRT’s revenue was VND 16,634 billion, up 9% compared to that of the previous year; profit before tax was VND 278 billion, down 26%. The reason for the decrease was mainly because FRT made provisions for bad debts in the fourth quarter of 2019; invested in digital conversion for FRT, including 2 chains being FPT Shop and Long Chau, and expanded Long Chau chain.

Ms. Nguyen Bach Diep said that, in 2019, the turnover of 2 programs F-Friends and Subsidy witnessed a sharp decrease, which resulted in the fall of the Company’s turnover. To be specific, the turnover of F-Friends was VND 800 billion, down 1.4%; that of Subsidy was VND 100 billion, which was deceased by more than 85% compared to that of the same period in 2018 (in 2018, VND 764 billion).

The profit of 2019 was affected by the system, which made the Group have to handle bad debts for 2 programs F-Friend and Subsidy. The provision made in 2019 was about VND 100 billion, while in 2020, only VND 10 to 15 billion.

In addition, in accordance with the orientation of importing international accessories to increase the profit margin, in 2019, the Company must liquidate all domestic accessories.

According to Phan Hang, Dau tu Chung khoan

Published May 28,2020

24 Jun

FPT Retail: Opening new 220 Long Chau pharmacies, the turnover of pharmaceutical segment is anticipated to soon reach VND 5,000 billion

FPT Retail expects to expand Long Chau pharmacy chain to 220 stores in 2020, the pharmaceutical segment is anticipated to contribute approximately VND 5,000 billion, accounting for 40% of the total turnover in the next 3 to 4 years.

The pharmaceutical segment will contribute about 40% to FRT’s total turnover at an expected amount of VND 5,000 billion in the next 3 to 4 years.

 

On 28 May afternoon, at FPT Tan Thuan Towel (District 7, HCMC), FPT Digital Retail Joint Stock Company (FRT) has held the Annual Meeting of Shareholders of 2020. The Meeting has approved on fundamental targets and be ready to conquer new milestones.

 

According to the report of the Company’s Board of Directors, in 2019, the Company achieved VND 16,634 billion of revenue, up 9% compared to that in 2018. Remarkably, the online revenue reached VND 3,899 billion, an increase of 60% compared to that in 2018, accounting for 23.4% of the Company’s total revenue, profit before tax in 2019 reached VND 278 billion, down 36%.

 

In the first months of 2020, the Covid-19 epidemic was widespread, having a strong and multidimensional impact on economic activities on a global scale. However, FPT Retail quickly adapted, sought opportunities in challenges and obtained some positive results in the first quarter.

 

Specifically, the revenue reached VND 4,093 billion, profit before tax reached VND 47 billion, increasing VND 61 billion compared to that in the fourth quarter of 2019. Long Chau reached VND 239 billion of turnover, up 20% compared to that in the fourth quarter of 2019, 2.5 times higher than that compared the same period in 2019.

 

Therefore, in 2020, FPT Retail expects to achieve VND 15,320 billion of revenue and VND 220 billion of profit before tax. In the circumstance of facing difficulties and recovering the business after the Covid-19 epidemic at the same time, such target has been carefully planned, balanced and calculated by the Company.

 

The major goal of FPT Retail in 2020 is to promote the pharmaceutical business. After discovering the secret to success for Long Chau chain, in 2020, FPT Retail plans to expand Long Chau pharmacy chain to 220 stores and increase its coverage nationwide.

 

The pharmaceutical retail industry is divided into three channels, including hospital, clinic and pharmacy channel. Therefore, FPT Retail expects to account for 30% of the market share of pharmaceutical retail channel through pharmacies in the next 3 to 4 years, the pharmacy segment will contribute about 40% of the Company’s total revenue at approximately VND 5,000 billion.

 

According to the survey, FPT Retail considers pharmaceuticals as a potential market to develop in the long term and the Company believes that the growth of the Company will follow the ‘boom’ of this segment in the near future.

 

In the long-term plan, FPT Retail is oriented to develop the pharmaceutical segment in a planned and controlled manner like the operation of the Company’s digital retail system.

 

The Company will focus on building logistics segment, increasing the number of pharmacies, developing personnel with management and professional qualifications to increase operational efficiency.

 

For the pharmaceutical industry, according to the World Bank, the aging population in Vietnam is growing very quickly. When the population is aging, the expenditure for health care is also increased. As a result, the pharmaceutical market in Vietnam is considered quite attractive to investors.

 

According to BMI, a market research firm, sales of this market will increase from USD 7.7 billion in 2021 to USD 16.1 billion in 2026. The compound growth rate will reach 11%. In addition, the market research firm Ken Research also forecasts that the sales of the pharmaceutical market in Vietnam will witness strong growth in the period from 2020 to 2022, specifically from USD 7.6 billion to USD 10.1 billion.

According to Hai Yen, Bao Dau tu

Published May 28, 2020

22 Jun

FRT is confident that Long Chau pharmacy chain will break out from 2021 and account for 30% of the market share in the next 2 to 3 years

Recently, due to the Covid-19 epidemic and the directive of social distancing, the locations for Long Chau’s new pharmacies were not licensed, so the opening is slowed down. Although the situation has become stable now, Ms. Diep said, under the current context, it is expected that Long Chau will reach the break-even in 2022 (the initial plan is to incur profits in 2021).

As one of the enterprises behind ICT retail trend, FPT Retail (FRT) had a strong battle phase and ranked second in the market. This is noteworthy, however, after the game of FPT Shop ended, it was also the time when this segment went into saturation stage, and the lack of substitute factors made the business continuously decline.

At the moment, a similar retail strategy is taking place in Long Chau pharmacy chain, in 2020, FRT will focus all of it resources for the expansion phase after finding the secret to success. Concurrently, drawing experience from old lessons, FRT has also prepared the “alternation” via new industries from F.Beauty to Fado (cross-border sales), selling air tickets, motorbike insurance, etc.

On average, a Long Chau pharmacy will reach the break-even after 6 months with the investment costs from VND 400 million to VND 1 billion

Sharing with the shareholders at the Annual General Meeting of Shareholders of 2020, Ms. Nguyen Bach Diep – Chairman of FRT said: “Opening a new business chain will certainly incur losses in a few years, then it will begin to break even. There is a story in the retail industry: one day, the number of new stores opened is less than the number of the existing stores, that is when the break-even is coming, usually.

In particular, when the enterprises decide to expand investment, we do have confidence, which means that we already have the secret to success for the chain. Later, when we reach quite a large scale, the negotiations with the suppliers … will be better. Finally, in terms of administration, the cost we deploy for the back-office team to support the trading will be more optimal. Because the more stores that are opened, the more revenue we can record, while the fixed cost is remained the same, the business efficiency will be improved.”

It can be understood that, at that time, the cash flow will be returned gradually. For example, from the FPT Shop chain, according to Ms. Diep, when the Company starts to generate profits, the profits in the following years will increase dramatically. The same thing happens to Long Chau, in the first year, FRT will have to invest a lot in researching, writing technology software, building call center team, etc.

According to the Head’s calculations, in general a Long Chau pharmacy will reach the break-even after 6 months, which means that it will generate profits after 6 months. Thus, when the number of new stores opened is less than the number of the existing stores, it is time when Long Chau will break even on a comprehensive scale. Currently, the investment cost for a Long Chau pharmacy ranges from VND 400 million to VND 1 billion, in fact, this also depends on the area of the store and its location.

The investment cost for a Long Chau pharmacy ranges from VND 400 million to VND 1 billion.

According to the current context, the break-even will be in 2022

Although being unable to disclose details, Ms. Diep shared that the gross profit margin of pharmaceutical segment is now about 3% higher than that of ICT segment. “That is just the beginning. After the initial investment stage, the business will fight with competitors to attract customers. Then comes the negotiation stage with the customers for better input prices, and self-developing private labels will contribute significantly to the improvement of profit margin.”

Now, Long Chau has reached the milestone of 100 pharmacies, the Company has also decided on 40 locations to open new stores in the second quarter of 2020. Long Chau is selling prescription and over-the-counter medicines, functional foods, cosmetics, and health care products. By the end of the first quarter of 2020, Long Chau has achieved VND 239 billion of turnover, up 20% compared to the that of fourth quarter of 2019, 2.5 times higher than that of the same period in 2019.

FRT has a strategy to increase the coverage of Long Chau pharmacies nationwide, accounting for about 30% of the market share of pharmaceutical industry through pharmacies in the next 2 to 3 years. For the plan to 2021, the chain will officially enter the stage of ‘boom’ when it generates profits for the first year, the number of stores is expected to increase to 420 with the turnover increased by double to VND 4,300 billion. The figure for the following year (2022) will be VND 6,500 billion in revenue and VND 86 billion in profits with 620 pharmacies.

Despite that fact, recently, due to the Covid-19 epidemic and the directive of social distancing, the locations for Long Chau’s new pharmacies were not licensed, so the opening is slowed down. Although the situation has become stable now, Ms. Diep said, under the current context, it is expected that Long Chau will break even in 2022 (the initial plan is to generate profits in 2021).

It is expected that Long Chau will break even in 2022 (the initial plan is to generate profits in 2021). 

“We surely have to start as soon as possible in order to have the substitute for the future”

Back to the substitute story, FRT is also currently testing the F.Beauty model. According to Ms. Diep: “Recalling the time when opening FPT Shop, FRT put all of its time to survive and be ranked second. When the investment switched from FPT Shop to Long Chau, the ICT segment saturated while Long Chau had not been generating alternative profits yet, which made FRT face difficulties.

As a result, from such lessons, today FRT has to test in advance and discover the secret to success of the new segment along with the development of Long Chau. This is to ensure that, when Long Chau saturates, we will have another substitute segment.”

At the moment, FRT said it is experimenting with a cautious attitude. This is partly due to the Covid-19 epidemic, the Company does not have many opportunities to invest, research and evaluate much. But, “We surely have to start as soon as possible in order to have the substitute for the future“, Ms. Diep said.

In addition, the Deputy General Director Nguyen Viet Anh said that FRT’s big asset is 600 stores with an average of more than 1 million visitors per month, not to mention the number of online visitors which also reach more than 20 million per month. Together with 5,000 employees, FRT sees an opportunity to sell and cross-sell other products and services.

“For the example of selling air tickets, the number of new airlines opened in Vietnam together with the growth rate of existing airlines show the extremely hot growth of aviation industry. The number of air tickets sold can be estimated to reach 50 million tickets every year. So where have been these tickets bought and sold?”, Mr. Viet raised the issue.

It is estimated that about 20% of the air tickets are sold within the corporate sector, 10 to 15% via online channels (Traveloka, Tiki, etc.). And the other majority of 50 to 60% are sold through fragmented retail agents, which shows that FRT may have the opportunity to restructure the airline ticket market, while the commission for the airline ticket market can be up to hundreds of millions of USD, emphasized by the Deputy General Director of FRT. Besides that, FRT also found many other industries attracting such as motorbike insurance, etc.

Answering the shareholders about the remaining outstanding balance of F-Friends and Subsidy, the management board said that in 2019, the outstanding balance of F-Friends was more than VND 100 billion and was almost provisioned. Accordingly, in 2020, an additional amount of about VND 10 to 15 billion will be provisioned.

Particularly for the F-Friends program, it is still in operation in 2020 but in new directions. Last year, the F-Friends program was ready for bad debts from the beginning, the Company also calculated this debt into the selling price. However, the software lockout error caused the outstanding loan to increase unusually, which made the reality come out of expectation.

In 2020, the software has been handled more stably. The Company has also redesigned F-Friends in the direction of combining with existing instalments to switch the loans to be incurred by the instalment party. The person handling bad debts will now be the instalment party instead of FRT.

Regarding F.Studio chain, Apple products currently account for 30% of FRT’s total digital sales. In general, for Vietnam market, FRT represents about 35 to 40% of the market share of Apple products.

According to Tri Tuc, CafeF

Published May 29, 2020

22 Jun

FPT Retail aims to reach VND 220 billion of profit in 2020 and plans to expand Long Chau Chain to 220 stores

FPT Retail still expects to account for 30% of the market share of pharmaceutical retail channel through pharmacies in the next 3 to 4 years, in the future, the pharmacy segment will contribute about 40% of the Company’s total revenue at approximately VND 5,000 billion.

On 28 May, FPT Digital Retail Joint Stock Company (FPT Retail) has organized the annual General Meeting of Shareholders of 2020.

According to the report, in 2019, the Company achieved VND 16,634 billion in revenue, up 9% compared to that in 2018. Remarkably, the online sales reached VND 3,899 billion, up 60% compared to that in 2018 and this accounted for 23.4% of the Company’s total revenue. In 2019, the trading of accessories and digital SIMs was a bright spot when achieving a high growth rate, to be specific: the number of accessories and sim cards sold were 5.2 million, representing 29% and 858,000 products, 67%, respectively, compared to 2018. Profit before tax in 2019 reached VND 278 billion, down 36%.

According to the financial report for the first quarter of 2020, FPT Retail has witnessed a slight increase in revenue to VND 4,093 billion. Profit before tax reached VND 47 billion, up VND 61 billion compared that of the fourth quarter of 2019. Long Chau’s turnover reached VND 239 billion, an increase of 20% compared to the fourth quarter of 2019, 2.5 times higher than that of the same period of 2019. Continue focusing on promoting online sales, especially in the period of Covid pandemic, online sales in the first quarter of 2020 were VND 1,107 billion, up 20% compared to the fourth quarter of 2019; accounting for 27% of the total turnover of FPT Retail.

At the end of May 2020, Long Chau chain has officially reached 110 pharmacies, serving tens of millions of visitors in more than 30 provinces and cities nationwide.

Strategic orientation in 2020

Since the beginning of the year, the Covid-19 pandemic has caused many negative effects on all aspects of the economy on a global scale. It can be said that this pandemic is considered a ‘big shock’ to the economy. Up to now, Vietnam has basically managed to control the disease, but the situation in the world is still complicated. According to experts’ forecast, the domestic economy still faces many difficulties and challenges.

Therefore, in 2020, FPT Retail aims to gain VND 15,320 billion in revenue and VND 220 billion in profit before tax.

This year, FPT Retail continues to focus on increasing the revenue of the store system by introducing new products in the form of shop – in – shop to improve the efficiency of sales per store. In addition, FPT Retail will also optimize operating costs of stores by increasing labor productivity and applying new technologies. At the same time, the Company will organize trainings, improve sales skills and customer service style of all employees. Along with investing in human resources, the Company will also invest in equipment for sales purpose, refresh the image of the store and implement attractive and practical incentive programs.

After discovering the secret to success for Long Chau chain, in 2020, FPT Retail plans to expand the Long Chau pharmacy chain to 220 stores and increase its coverage nationwide. According to the survey, FPT Retail considers pharmaceuticals as a potential market to develop in the long term and the Company believes that the growth of the Company will follow the ‘boom’ of this segment in the near future.

Consequently, in the long-term plan, FPT Retail is oriented to develop the pharmaceutical segment in a planned and controlled manner like the operation of the Company’s digital retail system. Accordingly, the Company will focus on building logistics segment, increasing the number of pharmacies, developing personnel with management and professional qualifications to increase operational efficiency.

It is known that the pharmaceutical retail industry is divided into three channels: hospital, clinic and pharmacy channel. FPT Retail still expects to account for 30% of the market share of pharmaceutical retail channel through pharmacies in the next 3 to 4 years, the pharmacy segment will contribute about 40% of the Company’s total revenue at approximately VND 5,000 billion.

The Meeting also approved the profit distribution plan of 2019, 10% of which is paid by cash (VND 1,000/share) and paid in the third quarter of 2020. Regarding the profit distribution plan in 2020, the policy that rate of dividends paid by cash will not exceed 15% (VND 1,500/share) was also approved. In addition, FPT Retail’s shareholders approved the election of additional member of the Board of Management for the term of 2017 – 2022, who is Mr. Nguyen Dac Viet Dung, an independent member of the Board of Management.

According to Cafebiz

Published May 28, 2020

3 Jun

Long Chau pharmacy chain has reached 100 stores

This May, Long Chau pharmacy chain, under FPT Retail, has officially reached the milestone of 100 pharmacies over 30 provinces and cities.

Long Chau pharmacy chain has reached 100 stores over 30 provinces and cities.

After two years being taken over by FPT Retail, Long Chau system has officially reached 100 stores, serving millions of customers in more than 30 provinces and cities across the country. The 100th store has been put into operation, which marks an important milestone in the development of Long Chau system.

It is known that Long Chau chain currently sells prescription and over-the-counter medicines, functional foods, cosmetic pharmaceuticals and health care products. At the end of the first quarter of 2020, Long Chau was considered the bright spot in FPT Retail’s business pictures with the turnover reaching VND 239 billion, up 20% compared to the fourth quarter of 2019, 2.5 times higher than that in the same period in 2019.

Until now, Long Chau has decided on 40 locations to open new stores in the second quarter of 2020. It is expected that Long Chau will have 200 stores by the end of 2020.

FPT Retail’s strategy is to increase the coverage of Long Chau pharmacies nationwide, representing about 30% of the market share of pharmaceutical channels through pharmacies in the next 2 to 3 years.

According to Anh Duong, Cafebiz.

Published May 18, 2020

3 Jun

Long Chau pharmacy chain has reached 100 stores

FPT Digital Retail Joint Stock Company (FRT) announced that Long Chau pharmacy chain has officially reached 100 stores across 30 provinces and cities nationwide in this May.

“The 100th pharmacy has been put in operation, which marks an important milestone in the development of Long Chau system,” emphasized by FRT in the latest press release.

The pace of opening new stores in the past month is quite rapid compared to the number of 83 stores in 19 provinces and cities by the end of the first quarter of 2020. Besides offline sales, Long Chau system also promotes online sales with home delivery service within 60 minutes.

When the first quarter of 2020 ends, Long Chau is considered a bright spot in the business picture of FPT Retail with the turnover reaching VND 239 billion, 2.5 times higher than that compared the same period in 2019. After two years being taken over by FRT, the revenue of this chain has accounted for nearly 6% of the total revenue, doubling the contribution at 3% of FRT’s total revenue in 2019.

The representative of FRT also said that currently Long Chau has decided on 40 locations to open new store in the second quarter of 2020. Long Chau has set the target of reaching 200 stores by the end of this year.

According to FRT’s estimation, there are more than 30,000 pharmacies operating in the country with a total market size of about USD 2 billion (equivalent to 25% of the pharmaceutical retail scale including pharmacy and hospital channel). However, this market is quite fragmented when there is really no dominant brand. The pharmaceutical retail chain with the largest number of stores today is Pharmacity, which was established in 2011, with 328 stores as of April 2020.

In the circumstance where the ICT industry is entering the saturation phase, FRT is stepping up to find growth momentum from new businesses in which Long Chau pharmacy chain is highly promising.

In the annual report of FRT in 2019, the pharmaceutical market in Vietnam is assessed to be quite attractive to investors. According to BMI, this market sales will increase from USD 7.7 billion in 2021 to USD 16.1 billion in 2026. The compound growth rate will reach 11% in VND.

The IMS Health also forecasts that the average spending on pharmaceuticals per capita in Vietnam will increase to USD 50/person/year in 2020 compared to over USD 20/person in the period of 2015-2017. According to the calculations, 25% of pharmaceutical revenue in Vietnam, equivalent to nearly USD 2 billion (in 2021) to about USD 4 billion (in 2026), will come from the pharmaceutical retail market through pharmacy channel.

In addition to pharmaceuticals, FRT is testing a number of new industries such as electronics, e-commerce and latest, cosmetics, however they are still in the testing phase and have not been officially announced.

According to Ky Ngoc, Forbes Vietnam

Published May 18, 2020