Vietnam’s Mobile World saw a 43 per cent jump in revenue in the first five months of this year.

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The mobile device and consumer electronics retailer posted net sales of VND37 trillion (US$1.61 billion) and an after-tax profit of $55.8 million, 44 per cent up year-on-year.

Of its divisions, electronic retail arm Dien May Xanh accounted for 56 per cent, mobile phone retail chain The Gioi Di Dong 41 per cent, and its fledgling grocery chain Bach Hoa Xanh 3 per cent.

According to Mobile World’s CEO Tran Kinh Doanh, the company plans to expand Bach Hoa Xanh to 1000 stores in Ho Chi Minh City, and more in other provinces.

The Gioi Di Dong chain has scaled down its network to 500 stores this year after closing six stores.


Vietnam’s The Gioi Di Dong closed stores


Despite revenue growth, Vietnam retailer Mobile World has shuttered six The Gioi Di Dong stores.

It closed the outlets last month following one earlier closure with a plan to maintain 1065 stores nationwide. The company says it has decided not to expand its store network to focus on revenue growth, but with the closing spree revenue for The Gioi Di Dong last month dropped 5 per cent from a year earlier to US$126.85 million.

Now The Gioi Di Dong looks set to open only 500 locations by the end of this year instead of the previous goal of 1000 stores, according to chairman Nguyen Duc Tai.

Mobile World is also struggling with its grocery business, Bach Hoa Xanh, which has added only 3 per cent to the company’s profit.

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In the first quarter of this year, revenue reached $1.31 billion, up 43 per cent year on year, to produce profit of $45.94 million, up 44 per cent.


Vietnamese retailers look to foreign retail markets


In late June, The Gioi Di Dong JSC, which owns the largest mobile phone distribution chain in Vietnam, opened its first shop in Phnom Penh, Cambodia. The shop in Cambodia is named BigPhone, but it has a brand identity like The Gioi Di Dong shops in Vietnam.

The Gioi Di Dong hopes it can earn $100,000 a month from the first shop, and plans to open 10-15 shops in Cambodia this year.

A senior executive of Pico, a home appliance distribution chain, in early 2016 told the press that the chain was considering penetrating markets like Myanmar, Laos and Cambodia. Of the neighboring markets, Myanmar is the first choice because of favorable conditions of the market: it is easy to find retail premises, and there is less competition.

Nguyen Ngoc Hoa, when he was chair of Saigon Co-op, affirmed the importance of foreign markets for Saigon Co-op, saying that the retail chain targets Laos and Cambodia for its plan to expand the network.

“The most important thing in implementing the expansion plan is that Saigon Co-op find reliable partners in doing business overseas,” he said.

A senior executive of Pico said he can see that there would be both economic and non-economic barriers in the Cambodia and Myanmar markets. He said it would take time to learn about the consumption habits, local culture, the laws and economic factors of the target markets.

Ho Viet Dong, CEO of The Gioi Di Dong in Cambodia, said though the retail chain has good relations with mobile phone manufacturers, it still faces difficulties in doing business in Cambodia.

“The mobile phone market here is very complicated,” he said. “Besides, the training of the labor force for long-term business plan also needs consideration.”

Meanwhile, according to Saigon Co-op’s CEO Nguyen Thanh Nhan, the plan to open a supermarket in Cambodia has been delayed because of the change of the Cambodian partner.