Ho Chi Minh City Stock Exchange-listed retailer Mobile World Investment Corp (MWG) – a portfolio company of Vietnam-focused private equity firm Mekong Capital – is planning to push into e-commerce to stave off competition as also to align itself to changing purchase behaviour.
Mobile World chairman and CEO Nguyen Duc Tai said, the firm would be venturing into a combination of offline and online businesses across the region, tapping the $6 billion online market in Southeast Asia.
Mobile World currently operates two retail brands – Thegioididong for mobile and DienmayXanh for electronics devices.
Internally, the company expects to nearly double sales to VND2.9 trillion via the online channel in 2016, up from VND1.6 trillion last year.
MWG holds 35 per cent market share in the country’s mobile market with an estimated size of VND60 trillion ($2.7 billion). And, it accounted for 10 per cent market share in the VND70 trillion electronics equipment market.
The company is also setting sights on expanding to Laos, Cambodia and Myanmar by 2020. In the local market, it is planning to expand its mini supermarkets brand, Bach Hoa Xanh. The model is being tested in Ho Chi Minh City, Tai said.
Listed in July 2014, Mobile World is currently one of the top 10 stocks in terms of market value. Mekong Capital initially invested in Mobile World in 2007 for a 32.5 per cent stake. In 2013, the investor announced its first partial exit, reducing the holding to 25.8 per cent, which marked its most successful divestment, earning an 11x return. Mekong Capital currently holds 8.9 per cent in the retailing company, according to data from listed stock information platform CafeF.
“Foreign investors now have a strong presence in the consumer goods retailing segment and not yet really in mobile device retailing,” said Tai.
Thailand’s Central Group acquired 49 per cent in Nguyen Kim last year to gain a significant presence in Vietnam’s electronics and home appliance retailer. Another overseas investor, Aureos Capital bought 21 per cent of Tran Anh Digital – the owner of nearly 30 electronics stores across Vietnam – before selling the stake to Japanese retailer Nojima, who now holds 31 per cent in Tran Anh Digital World.
In the mobile device category, Mobile World is the largest player with a network of 780 Thegioididong stores. In the electronics goods retailing, even though MWG’s store strength is higher, Nguyen Kim is the market leader.
The move by Mobile World to push into wider-format retailing and e-commerce hints that it is getting ready to challenge the Thai competitor.
Following the Big C Vietnam buyout, Central Group said, its operations in the country reached around 100 stores, including 30 Big C hypermarkets and 13 Lanchi supermarkets in rural areas that it acquired in late 2015. Central Group is also said to have an e-commerce platform in Vietnam.
Seedcom founder has no stake in MWG
Founder of homegrown venture capital fund Seedcom, Dinh Anh Huan, is no longer a shareholder in Mobile World, Tai told DEALSTREETASIA.
Huan, a founding member of Mobile World, launched Seedcom in 2014, considered as one of the first homegrown venture capital funds in Vietnam.
Seedcom has backed a spate of local startups, from technology companies to food and fashion chains, and such as Tiki (which has bagged eight-digit dollar investment from VNG Corporation), Giaohangnhanh (Seedcom has invested in this startup to the series A stage), Haravan, The Coffee House, Fivetech and Pizza4P.
In total, Seedcom has funded 15 local startup companies, in some of which the VC firm has direct management.