Pico sells to foreigners, home appliance market remapped
26-06-2015 15:14:27+07:00
Pico sells to foreigners, home appliance market remapped
If Pico’s deal to sell shares to a Thai group wraps up as expected, the domestic home appliance market will have a new face as all the big players in the market will join hands with foreign investors.
Analysts noted that the competition in the home appliance market is getting fiercer. The price war among suppliers has caused profit margins to fall from 30-40 percent to 5 percent. Weak supply chains have left the market.
WonderBuy stopped its operation some years ago. Best Carings and HomeOne, one after another, also shut down. A lot of small supply chains in Hanoi are on the verge of bankruptcy.
In such conditions, NKT Company earlier this year had to sell 49 percent of Nguyen Kim supply chain to Power Buy, a subsidiary of Central Group from Thailand.
More recently, Nojima, a home appliance retailer from Japan, has bought 21 percent of Tran Anh home appliance chain, raising its total ownership ratio in Tran Anh to 30.92 percent and becoming the foreign largest shareholder.
There is a common characteristic in all three affairs that the supply chains have revived after they admitted foreign groups as shareholders.
Central Group announced that Nguyen Kim chain would have 50 supermarkets by 2019. As for Tran Anh, it plans to open 4-5 new supermarkets in the north in 2015.
What is happening with Pico?
Established in July 2007 with initial capital of VND15 billion, Pico witnessed impressive growth in the first years of operation with revenue of roughly VND3 trillion a year.Nevertheless, the supply chain has scaled down recently because of low demand and stiff competition.
After transferring its branch in HCM City to Lotte, the retailer from South Korea, and shutting down the supermarket at No 35 Hai Ba Trung Street in Hanoi, Pico now has only six supermarkets.
Local newspapers recently reported that the Thai Central Group owned by the Thai richest billionaire Chirathivat is negotiating the purchase of 49 percent of Pico’s shares like he did with Nguyen Kim.
Some other sources said Nguyen Kim, not Central Group, would buy Pico’s shares. However, if this happens, Pico would still fall into the hand of Central Group, though the Thai big guy would have to take a roundabout to swallow Pico.
If so, the Vietnamese home appliance market will be restructured. What will happen if all the big Vietnamese players – Nguyen Kim, Tran Anh and Pico – all have to sell their shares to foreigners?
