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.
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
From being an unpaid intern for a year to holding the position of managing FPT Shop phone chain, then conquering Long Chau drugstore chain,… Mrs. Nguyen Bach Diep has been going through many ups and downs. However, the road ahead is still hard because she herself put pressure and challenges herself as she is still far from her opponent.
Talking with businesswoman Mrs. Nguyen Bach Diep – Chairwoman and CEO of FPT Retail Joint Stock Company (HOSE: FRT) on International Women’s Day, March 8th, about career, human affairs …
In 2018, FPT Retail opened 60 more stores, bringing the total number of stores to 550, the average sales of each store also increased compared to 2017, reaching VND 2.4 billion. Although it was launched behind other retail businesses, which is the secret to the effectiveness of FPT Retail business?
The criterias for FPT Retail to open a store are densely populated areas such as near markets, schools, trade centers, and the density of traffic stream. At the same time, the best place is near the opponent’s store, which is a safe point because I can measure the number of customers and that sales of that store.
If I open the stores near those of the rivals, there is definitely an increase in competition. However, in the general market, customers will normally be loyal to certain brands, but there are also neutral customers. For example, among a few thousand products, FPT Shop is promnent in this product, competitors are known for other products, customers will then choose which product is suitable for them. It’s like the way you drink Coca Cola or Pepsi. By nature, you cannot know which one is better, so there are ones prefer Coca, others go for Pepsi. As a result, they both have shares in the market. The phone market somehow works like that. There are also customers who are loyal to one brand and also have more neutral customers, they can deliberate different brands before buying.For other services and programs, the shops are kinda similar, so it is difficult to tell the differences. However, FPT Shop has a strong position in the high-end segment, thanks to previous history. As FPT stores were still a showroom other companies such as Nokia and Samsung, the investment in those store were considerable. At the same time, FPT Retail was also the first company to bring Apple to Vietnam with brand shop stores such as F.Studio … The brand FPT Shop was created from such cases with high-end product lines for comsumers to choose.
FPT Retail entered the pharmaceutical retail business when the mobile phone market, the main retail segment of the company, is gradually entering a saturation phase. According to you, is this judgment true?
By nature, the phone segment is already saturated, because the growth of the phone market is only a few percent per year, so the drugstore chain will be the future direction to help FPT Retail grow more. In 2019, this drugstore chain has not developed enough to contribute much to revenue of the Company.
However, in the telephone segment, FPT Shop will still try to find new directions, exploit other channels to have a growth rate of 15%, such as installment payment (with 10% remaining), sales channel for business, F.Friends … , which means the company will actively find customers rather than customers themselves go to FPT
In the future, what are the main factor that contributes to to the growth of FPT Retail, FPT Shop, F.Studio or Long Chau pharmacies? FPT Shop is still the main business in 2019, Long Chau and F.Studio do not contribute much. Specifically, according to the 2019 plan, the Company’s revenue is VND 17,700 billion, pre-tax profit is VND 560 billion, rising by 20% compared to 2018. In the revenue structure, the share of Long Chau contributes VND 500 billion. Regarding F.Studio, the original plan is to open 100 stores in 3 years but Apple’s policies were not favorable, plus their products were not good enough in the last import. Hence, the Company will stop investing too much on this at the moment. The future plans will still depend on whether Apple’s policies and products change, then FPT Retail will return to set a target for this chain.
In addition, the company also set a target of accessories revenue this year, which is to reach VND 1,000 billion, increasing about 40% compared to last year. There are many ways to achieve this number, such as changing suppliers, choosing products with more affordable price for the market, or investing in employee training … The company also aims to sell products through online channels this year, growing 25-30% faster, while the offline segment is 15%. The reason is now more and more people do not have time to go to the store, so they have goods deliver to the house. FPT Shop currently has a number of 550 stores through out 63 provinces and cities, mostly in Hanoi and Ho Chi Minh City.
About the business results in 2018, can you tell us how Long Chau drugstore chain has contributed? Does the progress of expanding the drugstore chain go as planned and does the company face any difficulties in the implementation process?
In 2018, FPT Retail opened 20 Long Chau drug stores. The plan is to open 50 more stores in 2019, so there will be about 70 drug stores from the end of the year.
Long Chau is divided into two categories: old stores are operating and new ones have been open. From 2018 up to now, FPT Retail has opened many stores with different criteria for testing such as big, small, in crowded residential areas or paired with FPT Shop’s shops to optimize surface. During the time of testing these model stores, a few things happened that helped me to realize many problems, know what needs to be focused. The first priority is still to open big pharmacies, but depending on the process of evaluating the performance of the store, if the efficiency is not good, the pharmacies need to sell another lines of products to produce revenue.
In addition, in the long future, the company wants to be convenient for customers. For example, if customers want to buy specific items, we also have big stores with all kinds of products. For customers only need to buy simple medicines like ones to cure flu, fever and want to be close to home, we also have to have small stores.
This year, FPT Shop plans to open the next 70-100 shops, in the process of opening, if we have an open space but at a little high price, it would be a waste if only FPT Shop uses it. The company will consider opening 2 stores simultaneously. Some points have tested this model of 2 stores in Ho Chi Minh City such as Le Van Khuong, Nguyen Oanh, Hong Bang … Those also have their own effectiveness and difficulties.
In fact, the drug business takes a bit more time than the phone one. In the old days, people used to buy medicines with prestige, beliefs. For instance, people get used to buying in the store with same pharmacist over the years. When the chain entered the market, it has to take time to persuade consumers to try to come the new pharmacies to experience the difference in prices, goods, service … Therefore, sales of medicines often increase slowly but steadily. In the end, it takes a while to see the store’s effectiveness.
This year, FPT Retail will build the entire system for Long Chau pharmacy chain, from operation to logistics … The opening of Long Chau pharmacy has a big advantage when relying on 70% of FPT Shop’s software system. The construction takes much less time. It only takes a few months, not the whole year as in the old days. However, the operation process also encounters two main difficulties. The first one concerns the recruitment, and personnel training. The second one is a more complicated process to get a license as this is a business relating to human health, so it needs the State’s management. Currently, opening a store takes about 30-45 days to apply for a permit.
According to market research companies, the growth of the pharmaceutical industry is 15-16% per year, but the important issue is that there are 30,000 – 40,000 small stores. It similars to the telephone segment 10 years ago. There were so many small phone stores. After that, the model of store chain was launched to give customers better experience, more prestige, so it attracted customers. Since then, the chain has increased strongly thanks to the market share of the other small stores, not from the normal growth of the market. The current pharmacy segment is also similar, and this is the start.
What impact does the new large shareholder group have on the company’s personnel and business activities?
No action has been seen from this major shareholder. But I think, if the current board of directors still maintains good indicators, it is likely that shareholders will be assured so they won’t bring more people in.
Having been with FPT Retail since the early days, to have the position as today, have you ever faced failure and how did you deal with it? Do you intend to find a new environment to challenge yourself more?
I have encountered lots of difficulties, but over the past 20 years, I have never intended to leave FPT. What makes me stick with FPT is the environment here, which gives me opportunities to develop myself, and then be recognized and rewarded. If you go to a different environment, that belief is almost zero and you have to earn it again. No matter how popular you are, others will only recognize you when you prove you can do something. Another part is that you will not be given full authority to decide on the job despite the qualities you have.
I won’t leave FPT Retail since here, I am also fine. There is no big problem causing frustration to leave. Besides, it doesn’t mean that you have challenges only when you go out. Here, the environment is demanding and challenging already. Not to mention my plan is not only to complete the company’s goals but also to keep up with the rival. It means that I can complete the plan with the Company, but the distance with the opponent is still quite far away, which leads to the fact that I have already put pressure and challenges on myself.
So what is your guideline for success as today?
In my opinion, this is just a matter of awareness. When I came to work at FPT, the first year I did not get paid but I still worked even though I was so misarble at that time. I didn’t even have enough money to have my bike patched. I worked becausse of my passion. Then I set a simple goal that this was a time that I could gain more experience rather then anything else.Indeed, after I had accumulated a lot of experience, I had many opportunities to interact with many different customers as convincing Prudential, 3-digit tobacco to buy products with project worth millions dollar. Since then, I have provided solutions for customers. I have grown up, having more experience to handle problems, which helped me to have more work. Then the Company noticed the capacity and here I am! Now, I see a lot of employees who only care about chainging job and complaining about why they do so much but don not get much. But they don’t think that the experiences they have earned are their valuable assets even when they left. It will help them to be more successful later. But they don’t realize that, which means they do not have good perception. It is also important to have good attitude at work. When assigned something, I have to do the best I can. I don’t want others to look at me with the thought that I cannot do something, so I try very hard. And then the opportunity comes.
As a businesswoman, what do you think are the advantages and difficulties women have?
From my personal point of view, women do not have much courage when it comes to taking risks, but they are more cautious in every job, which may cause them losing opportunities. I also missed the opportunity sometimes but I let it go very quickly to focus on another goal.
The second factor is the sensibility in new technologies. It seems that men understand it faster. Women are better at administration. Hence, they are not as good as men when it comes to techconology.
How do you keep the balance between work and family?
In regard to my family and my children, I still can do it well. There is nothing called trade-off when being in this position. My family still lives normally, especially on Sunday, which I have reserved for my family completely. Every day I go to work, but I still maintain common activities with my family like eating dinner together, or taking the kids to school. There is still interaction among family members. We still care for each other.
According to Minh An, Vietstock
FPT Retail ‘iron woman’ wants to build FPT Retail to become the No. 1 retailer in the digital market
Setting an example to employees and putting sincerity on top of all are the principles of Mrs. Nguyen Bach Diep, Top 50 “Most influential women in Vietnam”, from the time when she was a store leader 6 years ago to now- when she has become the Chairwoman of FPT Retail.
Mrs. Nguyen Bach Diep is now known with many names such as the “iron woman” of FPT, “female general” of FPT Retail, “Top 50 most influential women in Vietnam”, and “Top 20 most powerful women in business ” chosen by Forbes. Under her management, FPT Shop has risen from the modest business when first launched more than 6 years ago to the second-largest phone retailer in Viet Nam, and ranked first in term of sales per sqm.
What is the secret behind the success of the “female general” leading over 5,000 “troops” and developing over 500 stores in 63 provinces and cities? In addition to building an efficient operating system, human resource management is an important key, in which “sincerity” is always the priority of CEO Nguyen Bach Diep.
The determination to take sincerity as human resource strategy
Chairman Nguyen Bach Diep said that in FPT Retail, she is determined to build a transparent and fair working environment. However, the most important thing is to have sincere sharing and great encouragement.
FPT Retail CEO Nguyen Bach Diep
Therefore, according to Mrs. Nguyen, when there is a problem, each person should look back to see if he commits an error first, then consider if it is other people’s mistakes. Gradually, the approach to problems becomes more sympathetic, and solutions are reached easier. She also acknowledged an issue. When the position gets higher, the workload increase, the leaders tend to be far from reality, and become more conservative. When policies cannot be operated, listening to employees can help to solve the problem. The less sharing it is, the more misunderstanding it would be. That can lead to the fact that no one knows what others are doing, and are not able to be sympathetic toward each other.
“The most important key to solve all problems is sincerity. When you are sincere, you are not scared,” she concluded. Since then, the employees themselves must feel responsible, sincere, and want be a kind person to customers. “At that time, companies will grow firmly, and strongly,” said the FPT Retail CEO.
Leaders must work real hard
Sharing about the experience in building human resources, Mrs. Nguyen said, “to be an example” is a very important factor. The leader should be responsible for directing the “army” below. “I am the one who feels most clearly about how FPT Retail’s mission will go, how far it will go, and how many people will go,” she wrote in her letter to employees.
According to Mrs. Nguyen, the leader should be responsible for guiding the entire staff and setting an example.
For setting up the service culture and the three core values of Retailers (Dedicated to customers – Honest and responsible – Solid and supportive), she also committed to be the first person to pioneer, to preserve, and to follow “core values”. “If it is necessary to pressure the employees, then I must also be a role model, so that everyone can see how hard I work,” Mrs. Nguyen shared. The Chairwoman also found her fortunate to have an awesome team.
From the dedicated saleswoman to the store manager
In the last letter to employees in 2018, sharing about the principles of FPT Retail, the CEO emphasized “determination to build a strong Retailer from people to the culture of true service from person to person”. In fact, “being honest with each other” is what the chairwoman has chosen to act as a guideline for more than 6 years.
In the last year of college, she had a conversation with her classmate about the opportunity to intern at FPT. That was the very first chance for her to step into FPT with the position of saleswoman.
In the early days, everything was too new for the young employee. She did not know what to say to a customer when selling a machine. Many things like RAM, CPU, hard drive, keyboard, mouse… were strange to her. At that time her solution was “what you don’t understand, ask!”
She noticed that when she explained earnestly to customers the reason why they should buy this machine, not the others, customers then felt convinced and bought. The success rate at that time was very high: 6-7 out of 10 customers came buying products. It must be the first lesson that helped her to realize the importance of the principle “devotion to customers” and make it a prerequisite which is one of the three core values that Retailers need to comply with.
When Vietnam opened the market, businesses set up more factories in Vietnam and bought hundreds of computers at a time. The store started growing up with a great deal of projects, contracts worth thousands dollar. The leaders acknowledged Mrs. Nguyen’s ability, and she was assigned to be the head manager.
She recalled when she took the responsibility as a head manager, she felt pressured and became very strict. The surrounding air was so increasingly suffocating that she herself did not even recognize. Until one day, when she happened to hear the staff in the shop discussing her reaction, she was surprised and very sad.
Spending a night thinking about the solution to handle it, she chose to support and share to customers, use her experience to consult when employees had issues with customers. Since then, the cooperation became better and people also sensed her sincerity. The boss and the staff conscientiously worked together, the store’s revenue constantly increased.
The female manager drew to a conclusion that when it comes to problem solving, attitudes are that what matters. She felt that passionate devotion would convince people, and chose that way.
Building a system of FPT Retail ‘empire’ to more than 500 stores and more
In 2012, Chairman Truong Gia Binh decided to separate retail from distribution to become an independent company. At the very beginning, she did not know how to start, what process to follow. With the motto from the very first days, “what I don’t know, ask,” she learned from her opponent and gradually developed FPT Shop with 543 stores now.
First, thanks to the help of other company members to build a management software system. However, these companies appeared to lack flexibility in the set-up phase with many changes, trials and fixes, resulting in increasing costs. The CEO offered a solution to set up an in-house team. “They understand that their work plays a vital part, so they work hard regardless time,” she said
Gradually, thanks to the rapid development strategy, the annual turnover of FPT Shop increased considerably. In 2018, FPT Shop system achieved revenue of nearly VND 16,000 billion, profit after tax reached VND 348 billion, rose by 20% compared to the same period. Average sales per store reached VND 2.4 billion / month. In mid-2018 Retail Asia magazine announced the list of top 500 retailers in the Asia-Pacific region, in which FPT Shop “jumped” from position 356 to 305.
In addition, at the beginning of the third quarter of 2018, FPT Retail established a subsidiary in the pharmaceutical segment, namely FPT Pharmacy. Mrs. Nguyen Bach Diep is also the legal representative. By the end of 2018, this drugstore chain has 25 stores and plans to open 50 new stores in 2019, average monthly sales of over VND 2 billion per store.
In 2019, FPT Retail aims to become the No. 1 retail business in the digital market, selling 1 million sim, 1,000 billion accessories. Installments make up 50% of revenue, collecting on behalf increases by 50%, and revenue reach more than 13 million per year. Besides, the Retailer advocates 2019 as “the year of 3 core values”.
According to ICT News
Mrs. Nguyen Bach Diep, FPT Retail CEO and President, has been honored by Forbes Vietnam in its list of 50 most influential women in Vietnam in 2019.
Chairman and CEO of FPT Retail Nguyen Bach Diep (right edge) appears on the Forbes Vietnam cove in March 2019.
Forbes Vietnam has officially published its list of 50 “Most Influential Women in Vietnam”, including those pioneering in different fields from politics, entrepreneurship, business, research, social work, science-education, entertainment, and sports.
In this list, for the first time, FPT Retail “iron woman” was honored as one of the 20 most powerful women in the business sector in 2019.
The achievement of Mrs. Nguyen Bach Diep was to bring FPT Retail from 17 stores to the second largest mobile phone retail chain in Vietnam with more than 500 stores from North to South after 7 years of development. In 2018, FPT Shop earned the revenue of nearly VND 16,000 billion. The net income reached VND 348 billion, which rose by 20% compared to the same period.
“The common characteristics of these most influential women on the list are the passionate commitment, firmness, and tenacity, which help them not only succeed in their fields but also create, and affirm new values of modern women,” said Vo Quoc Khanh from Forbes Vietnam.
According to Forbes Vietnam, while the phone retail segment slowed down since the market was close to be saturated, FPT Retail joined pharmaceutical retail segment after successfully acquiring Long Chau pharmacy chain. By the end of 2018, this pharmacy chain has 25 stores and plans to open 50 new stores in 2019.
Mrs. Nguyen has been with FPT since she graduated from university. Through many positions, from business staff to manager, Mrs. Nguyen had gained great experience in many fields, including Internet and telecommunications before joining FPT Shop. At FPT Retail, she was named “iron woman” due to her determination.
This is the second time that Forbes Vietnam has announced its annual list of 50 “Most Influential Women in Vietnam”, comprising of a list of 20 powerful leading women in business in 2019.
According to Hai Yen