Mobile World (MWG) pockets huge income from selling watches
Mobile World (MWG) pockets huge income from selling watches
The strategy of “selling goods that they never sold before” partly helped technology retailer Mobile World to overcome the saturation of the smartphone market.
18 Mobile World stores that have begun selling watches and fruits in addition to the company's usual goods have been pocketing VND600-1,000 million ($26,086-43,478) of revenue on average for nearly two months. These stores sell an average of 500 watches per month.
With this quite satisfying business performance, leaders of Mobile World plan to add these products to more stores in the future.
Mobile World's net revenue and after-tax profit in this year’s first five months reached VND42.8 trillion ($1.86 billion) and VND1.79 trillion ($77.83 million), respectively. Cooling appliances are still its key goods, generating sales of VND2.3 trillion ($100 million), up 40 per cent on-year. In addition, online sales also occupied 16 per cent of the corporation's total revenue.
In May, Mobile World opened 47 stores across its multi-brand system, including thegioididong (specialised in mobile devices), Dien May Xanh (electronic goods), and Bach Hoa Xanh (food). The expansion raised the total number of Mobile World’s stores to 2,371.
In addition, during the period, the Bach Hoa Xanh chain also reported rosy performance. Accordingly, stores in the chain earned a revenuean average of VND1.4 billion ($60,870) per month, up 75 per cent on-year. The store chain also set the target of increasing the number of stores in the next six months.
Explaining the reason behind the shift towards watches and fruit, many experts stated that local demand for new gadgets is not as high as before, so retailers have been looking for new growth directions.
Germany-based market research company GfK forecasted that the local mobile market in 2019 will only grow by 1 per cent – the lowest ever growth rate.
Tai from MWG himself admitted that the time when people are lining up to buy new smartphones is over. “I use an older smartphone and don’t feel like upgrading because it’s still good enough to use.”
His example partly shows a new shopping attitude among Vietnamese consumers – purchasing new devices for their needs and not for new experiences and features.
Since early 2018, Mobile World has been limiting the expansion of thegioididong stores, with no new stores opened last year and 40 stores closed to focus on developing electronics chain Dien May Xanh. This is contrary to the corporation's speed of opening three stores every two days during 2015-2016.
