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Masan bets on one-stop stores as foreign rivals converge

Vietnam's Masan Group started out making instant noodles. Now it has the stores to sell them, along with a host of other goods and services as Vietnam's top retailer.


The group's expansion continued in September, when Masan opened the first of the all-in-one stores it calls "minimalls" under its Win brand. Lanh, an office worker living in Hanoi, has become a frequent customer.


"It's nice to be able to buy fresh food and medicine near my home on the way back from work," Lanh said.


The minimalls feature cafes, pharmacies and ATMs run by Masan Group companies. Masan, whose investors include top Chinese e-commerce player Alibaba Group Holding and South Korean conglomerate SK Group, plans to open 100 Win minimalls nationwide.


Now Masan holds about one-quarter of Vietnam's instant noodle market, an industry source said, putting the company second behind Japan's Acecook.


Source: Vietnam Investment Review


Vietnam was the third-largest consumer of instant noodles last year, at 8.6 billion servings, according to the World Instant Noodles Association. China and Indonesia rank first and second, respectively.


Masan also holds more than a 50% share in fish sauce, which is all but essential in Vietnamese cuisine. In 2014, the conglomerate expanded into beer, solidifying its position as a leading Vietnamese food and beverage group.


The purchase of Vingroup's retail business in 2019 fueled Masan's growth in retail. Masan took in 2,600 supermarkets and convenience stores from the deal with Vingroup, which was struggling to keep the locations profitable after a rapid expansion. Amid speculation that a foreign buyer would take them, Masan stepped in with the goal of adding a sales network under its umbrella, an industry source said.


Masan became Vietnam's fourth most valuable company by market capitalization in 2021. In a bid to add financial services to its portfolio, the group has picked up a 15% stake in private-sector lender Techcombank.


By having its various operations collaborate, Masan seeks to cater to Vietnam's rapidly growing middle class. Roughly half of the Vietnamese households are expected to be middle class by 2030, according to Euromonitor International, with annual disposable income forecast to grow by more than 30%.


Masan now runs about 3,500 WinMart supermarkets and WinMart+ convenience stores. The group will cut underperforming stores and add new locations until it reaches 10,000 shops under direct management in 2025. It started franchising in December 2021.


"Our network of modern retail stores now has a 50% market share," Quang said. For the first three quarters of 2022, consolidated revenue dropped 14% on the year to 55.5 trillion dong ($2.35 billion), but net profit jumped 32% to about 3.95 trillion dong.


But Masan faces growing competition from foreign players. Thailand's Central Retail is spending 30 billion baht ($861 million) over five years to double its number of stores in Vietnam to more than 710. Japan's Aeon plans to open about 100 supermarkets in and around Hanoi by 2025.


Anticipating fierce price competition down the road, Masan is working to branch out. One target is battery materials, which could position the company to ride an expected surge in electric-vehicle use.


Unlike Vingroup, Vietnam's top private-sector conglomerate, Masan has no plans to expand into real estate. Deputy CEO Michael Hung Nguyen cited the importance of responding to the basic needs of consumers. The real estate carries business opportunities, but also the risk of losses, he said.


(Nikkei Asia)



VIETNAM MACRO AND INDUSTRY REPORT - DECEMBER 2022


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