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Công ty CP Bán Lẻ Kỹ Thuật Số FPT / Posts tagged "Long Chau Pharmacy"
26 May

FPT Retail establishes clear lead in drugstores race

In a drugstores race between top electronics retailers Mobile World and FPT Retail that began in 2017, the latter is well ahead.

A drugstore of FPT Retail in Ho Chi Minh City. Photo by VnExpress/Phuong Dong.

FPT Retail, Vietnam’s second largest electronics retailer, announced mid-May that it has opened over 100 drugstores in over 30 provinces and cities, each selling prescription drugs, over-the-counter (OTC) medicines, functional foods and cosmetic products.

Mobile World, the country’s top electronics retailer, only operates 20 drugstores in Ho Chi Minh City. The stores have a total daily traffic of 4,000 visits, according to the company’s website.

Both retailers had entered the pharmaceutical retail market in late 2017, each acquiring their own chain of drugstores, hoping to cash in on a rapidly growing domestic appetite for healthcare and cosmetics products.

Mobile World was initially more aggressive in its approach, taking a 49 percent stake in the Phuc An Khang drugstore chain for an undisclosed sum. The chain was already operating the same 20 stores it has now, except that the name has changed to An Khang.

Nguyen Duc Tai, Chairman of Mobile World, had said then that the company planned to invest a further VND500 billion ($21.47 million) to gradually acquire a controlling stake in the pharmaceutical retail chain, and was eyeing an expansion to increase the number of stores to 100 in Ho Chi Minh City.

“Healthcare is a big market in Vietnam. Apart from Western medicines and vitamins, functional food is a future trend,” Tai had said.

FPT Retail was more tentative when it invested an unspecified sum for a 75 percent stake in the local Long Chau chain, which only operated four stores. Commenting on the acquisition at the time, Nguyen Bach Diep, Chairman of FPT Retail, had said that the investment was made via contribution of “personal capital” and did not affect the company’s core business activities.

FPT Retail had wanted to enter a market that was worth “around $5 billion, which had not yet identified a clear leader,” she said.

Vietnam’s pharmaceutical market is likely to grow to $7.7 billion by 2021 and $16.1 billion by 2026 from around $4.7 billion in 2017, with an average CAGR (compound annual growth rate) of 11 percent per year, according to market research firm IBM Research.

After operating Long Chau for a year, FPT Retail established a subsidiary to manage the drugstore chain with a chartered capital of VND100 billion ($4.3 million). The chain had expanded to 26 stores with an average monthly revenue of VND2 billion ($86,000) per store by the end of 2018, according to FPT Retail’s publications.

Big plans get bigger

Now, with over 100 outlets in operation, FPT Retail recently announced plans to double the number of drugstores to 200-220 by the end of the year, aiming to acquire 30 percent of the domestic drugs market over the next 2-3 years, earning revenues of around VND5 trillion ($215 million).

Diep said the pharmaceutical retail market was of roughly the same size as the mobile phone industry but was not dependent on the national economic situation. Its growth was guaranteed to maintain double figures, particularly with Vietnam’s spending on these products still at a low level.

FPT Retail’s drugstore chain earned revenues of VND500 billion ($21.47 million) in 2019, but suffered a pre-tax loss of VND40 billion ($1.72 million), according to financial statements.

The company said the chain made another VND240 billion ($10.3 million) in the first quarter of this year, but did not say if it made any profit or not.

Meanwhile, the An Khang chain is yet to prove profitable for Mobile World. According to the company’s first quarter financial statements, the company recorded a VND1.4 billion ($60,100) loss, attributed in proportion to its 49 percent shareholding in the drugstore chain.

Cumulatively, Mobile World has lost nearly VND7 billion ($300,000) in An Khang since its 2017 acquisition.

However, according to Mobile World’s management, expansion of the drugstore chain was “put on hold” to assess risks, contrary to their previous expansion plans. Nguyen Duc Tai, Chairman of Mobile World, said in an interview earlier this month that regulations governing the pharmaceutical industry were till vague, so his company was not ready to raise its stake to above 49 percent.

For instance, Vietnamese regulations require individual licensed practitioners and not businesses to stand legally responsible for each outlet, which could give rise to a lot of legal risk, he said.

“An Khang was not bought as a financial investment for reselling. It is still an interesting field, and Mobile World is ready to step up investment when regulations are clear and appropriate with corporate governance principles,” he said, adding that the company was directing investments towards retail groceries instead.

Vietnam’s pharmaceutical market sales are estimated at $6.5 billion in 2019, with hospitals accounting for 75 percent, according to securities firm Viet Dragon Securities.

The Ministry of Health estimates that Vietnam had around 57,000 drugstores last year, most of them small businesses run by families.

According to Phuong Dong, VnExpress
Published MAay 25, 2020
11 May

Long Chau’s turnover in the first quarter increased by 2.5 times compared to the same period in 2019, FRT plans to open 40 new stores in the second quarter

(VNF) – FPT Digital Retail Joint Stock Company (FPT Retail, HoSE: FRT) has announced the production and business results of the first quarter of 2020.

Long Chau’s revenue in the first quarter increased by 2.5 times compared to the same period in 2019, FRT plans to open 40 new stores in the second quarter. (Photo)

Accordingly, in the period, the Company brought in VND 4,093 billion of turnover, which is decreased by 3% compared to the fourth quarter of 2019. The profit before tax of the Company during the period reached VND 47 billion.

In FPT Retail’s system, Long Chau chain has gained VND 239 billion of turnover, up 20% compared to the fourth quarter in 2014, 2.5 times as much as that in the same period of 2019.

During the period, the Company has been focusing on promoting online sales, especially during Covid-19 epidemic period. Accordingly, the online turnover in the first quarter of 2020 reached VND 1,107 billion, up 20% compared to the fourth quarter of 2019, accounting for 27% of FRT’s total turnover.

Regarding the store network, at the end of the first quarter of 2020, FRT had 603 FPT-shop stores in total. At the same time, there were 83 Long Chau stores spreading across 19 provinces and cities, which is 13 new stores compared to the end of 2019.

Currently, Long Chau has decided on 40 locations to open new stores in the second quarter of 2020.

Besides, FPT Retail has decided on the date of organizing the annual General Meeting of Shareholders in 2020, which is 28 May 2020, under offline and online meeting.

Before that, the Company planned to hold the General Meeting of Shareholders on 20 March 2020; however, the meeting was postponed due to the complicated situation of Covid-19 epidemic.

According to Ha Thu, Vietnam Finance

Published May 6, 2020

11 May

Long Chau chain has decided on 40 locations to open new stores in the second quarter of 2020

Up to now, Vietnam is easing social distancing campaign gradually, FRT – the owner of Long Chau chain – accordingly will launch many practical incentives for the customers.

As one of the units that have been affected heavily by Covid-19 epidemic when the factories in China were locked down from operation, FPT Retail (FPT) has witnessed an increase in profits to VND 35,6 billion in the first quarter.

Promotions will be increased to bolster up the consumers’ demand after social distancing

Sharing with us, the Company’s representative said that the Covid-19 epidemic had a quite serious and multi-dimensional impact on all economic and social fields of our country. Especially for retail companies such as FRT, the difficulties brought by the epidemic are even more pronounced. The previous period of social distancing has somehow affected the business results of our Company. Accordingly, the turnover of March 2020 was decreased by 20% compared to February 2020.

“However, there are even opportunities in challenges, in the epidemic, the trend has been shifted to online shopping, the demand for personal devices to work from home has escalated, FRT has taken advantage of that to sell products, which has improved the risk management. This is also a big hit for FRT to be more creative in order to overcome the difficulties and discover new values”, FRT’s side said.

According to the statistics, FPT Shop’s laptops’ turnover in January 2020 was up by 79% compared to that of January and its turnover in March was up by 172% compared to January, “FRT will continue investing in this segment in the long term”.

At the moment, Vietnam is easing social distancing step by step, FRT accordingly will launch many practical incentives for the customers. To be specific, in this May, FPT Shop will offer big discounts for mobile phones, laptops and the customers can buy pay for many products in instalments with 0% interest and with a prepayment of from only VND 399,000. Concurrently, FPT Shop will also offer free anti-bacteria hand sanitizers and offer home delivery within 60 minutes.

The retail industry is expected to reach USD 180 billion in 2020: FRT will maintain the ICT in order to have new business expansion strategies

According the report of Vietnam Report, in the past few years, the retail industry in Vietnam has experienced rapid growth. The compound annual growth rate (CAGR) in the period 2013 – 2018 was 10,97%. The total retail revenue is expected to reach USD 180 billion in 2020, equivalent to an increase of 26,6% from 2018. However, the dramatic rise of digital and e-commercial retail channels is also worth high attention in the near future.

According to the forecast of World Bank, household expenditure will increase by 10,5% per year on average with the strong growth of middle class. Currently, about 70% of the Vietnam’s populations is financially secured, of which 13% is the middle class according to the world’s standard. Income of those people in this class are rapidly growing, which is very likely to reach 26% in 2016. From 2014, approximately 1,5 million of Vietnamese have joined the middle class per year on average, which indicates that households are reaching higher steps in the economic ladder after escaping the poverty. Economy growth, living-standard improvement and the increase of middle class are solid foundations to bolster up the extension of retail industry in the coming time.

Accordingly, in 2020, FPT Retail will continue to maintain the ICT chain so as to keep the growth rate the same as that in 2019. This is also a fulcrum for FRT to invest and extend new business paths. FRT plans to increase the revenue of the store chain by starting to sell sun glasses and watches in the form of shop-in-shop.

In 2020, there will be 200 new Long Chau pharmacies

In the pharmaceutical industry, there are 83 Long Chau pharmacies spreading across 19 provinces and cities, up 13 stores compared to the end of 2019. Up to now, Long Chau has decided on 40 locations to open new stores in the second quarter of 2020. It is foreseen that Long Chau may reach 200 stores at the end of 2020.

“FPT Retail’s current strategy is to expand the coverage nationwide, accounting for 30% of the pharmaceutical retail marker share through pharmacies in 2 to 3 years”, said the chain’s representative.

In the annual report of 2019, FRT assessed that the pharmaceutical industry in Vietnam is considered attractive for investors. According to BMI, the revenue in this segment will increase from USD 7.7 billion in 2021 to USD 16.1 billion in 2026. The compound annual growth rate will reach 11% in Vietnam Dong.

On the other hand, the pharmaceutical retail industry in our country is very fragmented. Because the average income and health awareness is becoming higher, people tend to choose modern, branding and GPP-standard pharmacies (with good pharmacy practices) instead of small and unqualified pharmacies. This shift is being accelerated party thanks to the Government’s policies that control the pharmaceutical retail industry via pharmacies (Circular 02/2018/TT-BYT regulating on good pharmacy practices)

For FRT, after discovering the secret to success for Long Chau chain, in 2020, FRT plans to expand the chain to 220 stores and increase the coverage nationwide. In the long-term plan, FRT sets goals to develop the pharmaceutical segment in a methodically planned and controlled manner the same as the operation of digital retail segment.

According to Tri Tuc, CafeF

Published May 7, 2020