Long Chau, An Khang and Pharmacity all want to expand massively, occupy every inch of land close to customers’ armpits.
According to information from FPT Digital Retail Joint Stock Company (FPT Retail), in the past year
Mobile World also aims to break even for the AVAKids chain.
At the recent Mobile World Investment investor meeting (stock code: MWG), Dong Doan Van Hieu Em, MWG member, said that the An Khang pharmacy chain strives to achieve this goal by December break even and then scale up stores to increase coverage.
Besides, MWG has no intention of downsizing or reselling this pharmacy chain. Previously, MWG also only planned to restructure pharmacies, closing ineffective locations. In addition, the company also posted to speed up the search for more good pharmacists to be the core staff.
An Khang has suspended expansion since the end of 2022. Currently, An Khang has more than 500 stores nationwide. The leader of Mobile World said that, compared to drug retail chains in the market, An Khang could rank third in number of stores and second in revenue.
"In 2023, the pharmacy chain does not have an expansion plan but will focus on optimizing operations in terms of display, inventory, pharmacist's qualifications, pricing and customer-attractive activities," said Mr. Hieu Em. According to him, the biggest value of a pharmacy is taking care of consumers' health.
For a pharmacy, Mr. Hieu Em believes that the two most important factors are convenience and adequate quantity of medicine. The company will only open a manageable pharmacy, about 30-40m2, but still achieve the above two goals.
According to Mr. Hieu Em, the pharmaceutical industry's revenue has increased continuously over the years, with a scale of about 7.1 billion USD (169,000 billion). Vietnam is ranked as one of the countries with the highest growth in the pharmaceutical industry. 70% of revenue comes from the ETC channel (hospital bidding), and 30% comes from the OTC channel (retail).
Currently, Vietnam has over 60,000 traditional pharmacies, accounting for 95% of the number and 85% of the pharmaceutical industry's revenue. The number and sales of An Khang's stores still need to be bigger than the above figure, so Mr. Hieu Em assesses that the potential of the pharmaceutical industry is still large.
In the revenue structure of An Khang, 60% is medicine; the remaining 40% belongs to the group, including functional foods and medical equipment, and the functional food group has a better profit margin. In the coming time, An Khang will increase the proportion of drugs.
As for the AVAKids chain - a startup model of MWG that retails children's products, Mr. Hieu Em said that by the beginning of the year, the company had stopped expanding the chain. In 2023, like An Khang, MWG has yet to make plans to expand this chain and will focus on optimizing operations and display to increase the shopping experience and diversify the product portfolio.
In 6 months, AVAKids achieved about 350 billion in revenue across 64 stores. The average revenue is about 1.2 billion VND/store. The AVAKids chain's breakeven target will be reached by this year's end. The average revenue per store is about 1.45 billion VND, which will reach the breakeven point.
Finally, about the Era Blue chain - MWG's ICT retail chain in Indonesia, Mr. Hieu Em said that this chain now has 5 stores. The revenue of each store in a month is about 5 billion VND.
MWG has just opened the Era Blue mini model, with an area of 350-400m2. "With an area like this, the revenue of more than 5 billion dongs is quite high," said Mr. Hieu Em. The revenue of this chain has also continuously grown over the months.
With this chain, MWG aims to increase the number of stores to 30. Mr. Hieu Em believes that this ICT retail chain has much potential for development. Era Blue also has better services than other ICT retailers in Indonesia.
"For example, if Indonesians buy an air conditioner at a local store, it may take 7-10 days to be delivered and installed. Era Blue will deliver it to the customer and install it immediately," said Mr. Hieu Em. This is also one of the main reasons this chain is well-received in Indonesia.
However, expansion cannot happen as quickly as domestic chains because it is difficult to find premises. The population density in this country is high, and the houses are quite small. MWG will have to find another way to open more stores soon. Era Blue's gross profit margin is still modest, with a few stores.
