Can Bach Hoa Xanh turn the losing tides for Mobile World (MWG) ?
Can Bach Hoa Xanh turn the losing tides for Mobile World (MWG) ?
As Mobile World (MWG) has been on edge due to the temporary closure of Dien May Xanh and thegioididong stores (its two main businesses), it is pinning its hopes on food store chain Bach Hoa Xanh to keep it afloat during the health crisis.
The temporary closure of thegioididong and Dien May Xanh stores put Mobile World in a corner
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The sales growth of MWG in the second quarter of this year will be negatively impacted and the gloomy outlook may last until the COVID-19 is reined in in Vietnam, especially in Hanoi and Ho Chi Minh City where about 20 per cent of its stores across the country are.
Along with aviation, retail is also heavily affected by the pandemic. MWG and PNJ recorded big drops of 50 and 47 per cent, respectively. In recent sessions, MWG has been impacted by the temporary closure of thegioididong store chain specialised in mobile devices and Dien May Xanhchain specialised in home-appliance products.
According to Rong Viet Securities, the performance of thegioididong has been seriously impacted, which aligns with global trends. Data published by Strategy Analytics showed that smartphone sales in February reached $61.8 million, down 38 per cent on-year. COVID-19 has interrupted the supply chain of mobile phones globally since January.
In Vietnam, while phone manufacturers in China are restarting operations and their stockpiles are enough to last for at least the next six months, prospects are still gloomy. The reason behind this is the prolonged plunge in demand for smartphones. People are staying away from crowded place like thegioididong stores to avoid the virus.Furthermore, the local smartphone market has reached the saturation point and consumption has been slowing down for years now.
Regarding Dien May Xanh, MWG is also looking at lost sales of TV sets because the European Championship has been pushed back to 2021.
On the other hand, Bach Hoa Xanhmay be the beacon shining in the dark for MWG. In contrast with thegioididong and Dien May Xanh, the Bach Hoa Xanhchain specialises in food and groceries and is allowed to stay open during the health crisis.
However, since the epidemic broke out, the stores have seen little change the number of customers. Currently, 60 per cent of Bach Hoa Xanhstores are located outside of Ho Chi Minh City, therefore, Rong Viet Securities forecast sales growth to remain stable but not strong enough to outweigh the losses felt across other business lines.
