Opened in 2010, Dien May Xanh in late 2014 reported revenue of VND1 trillion a year. Since early 2015, Dien May Xanh has been gearing up with the application of digital technology to internal administration and sales management.
In August 2015, Dien May Xanh began conquering the northern market. It had opened 75 supermarkets by the end the year which brought the turnover of VND4.4 trillion, holding 5 percent of the market share. The figure reportedly had increased to 14-16 percent by the end of 2016.
According to Tran Kinh Doanh, CEO of The Gioi Di Dong JSC, the owner of Dien May Xanh brand, after two years of following the ‘fast fight fast victory’ strategy, with 266 supermarkets, Dien May Xanh has become the biggest partner of home appliance manufacturers and distributors in Vietnam.
The owner of Dien May Xanh hopes its revenue in 2016 can reach VND12 trillion and the figure would be double in 2017 to VND25 trillion.
| Not only are they expanding networks by setting up new shops, home appliance chains are also trying to change their business models and increase online sales in an effort to get bigger market share. |
Analysts commented that unlike other retailers, Dien May Xanh has been following its own business strategy because it arrived later than other rivals.
A Dien May Xanh center covers 800-1,000 square meters, while the standard area for one home appliance supermarket is 4,000-5,000 square meters. With such a scale, the cost for one Dien May Xanh is VND6-10 billion, which is much lower than the traditional model.
Meanwhile, Dien May Xanh can receive financial support from The Gioi Di Dong which is believed to have powerful financial capability.
Analysts also praised Dien May Xanh’s policy on developing centers in city suburbs and provinces. This is believed to be a reasonable decision as retail premises in the central business districts of Hanoi and HCMC have become too expensive.
Other home appliance retail chains, having realized the efficiency of Dien May Xanh’s small-center model, have also followed the development model.
The centers of Media Mart developed recently, for example, have an area of between 700 and 1,500 square meters.
Even Nguyen Kim, which only developed large shopping centers, has also changed its strategy. Eight of 14 supermarkets put into operation in December 2016 run under the shop-in-shop model with the average area of 300 square meters. They are located in big shopping malls such as Big C in HCMC, and the provinces of Binh Duong, Binh Thuan and Thanh Hoa.
Meanwhile, strong brands including Thien Hoa, Nguyen Kim, Phan Khang and Dien May Xanh all have spent money to develop online sales. The number of customers buying goods on nguyenkim.com rises by 400 percent during sale promotions.
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Vi Ha
