Info that Con Cung Joint Inventory Firm is on the lookout for 200 stunning premises to organize for growth plans throughout probably the most traumatic interval of the pandemic could shock many individuals. Vietnam’s largest mom and child retail chain presently owns almost 500 shops nationwide, on monitor to have as much as 1,000 factors of sale subsequent 12 months.
Alternate with Younger intellectualsLuu Anh Tien – Co-founder and Basic Director of Con Cung stated that the corporate plans to speak in confidence to 600 shops by the top of this 12 months. Renting a considerable amount of house is a plan that has been deliberate upfront, not given that the worth of the premises is cheaper, or the expectation that the mom and child market could develop instantly after the pandemic.
Nonetheless, for greater than two months now, the growth of Con Cung has encountered many difficulties. The principle cause is that the corporate can not attain householders as a result of Authorities’s distancing laws.
In keeping with Mr. Luu Anh Tien, with a scale of about 7 billion USD, the mom and child retail market continues to be very giant to discover. This 12 months, Con Cung is anticipating income of as much as 300 million USD, however in comparison with the brand new market, it solely accounts for about 4%. The remainder of the “piece of cake” is usually within the arms of brick-and-mortar retailers. The CEO sees it as an excellent alternative, no matter how the general market is affected within the quick time period.
Con Cung itself has had a powerful breakthrough previously 5 years. Final 12 months, the COVID-19 occasion brought about the mom and child market to say no by about 15%, the corporate nonetheless achieved a development of 55% in income, reaching VND 3,832 billion. A particular function is that Con Cung internet revenue is 70 billion dong, 4.7 instances increased than the earlier 12 months. In reality, the chain might be extra worthwhile if the supply was eliminated as a result of 2019 warehouse hearth occasion that brought about greater than VND 100 billion in injury. This 12 months, Con Cung units a revenue earlier than tax of 250 billion.
Con Cung is likely one of the few fashionable retail chains which might be each fast-growing and worthwhile. The corporate additionally makes good use of the COVID-19 occasion that many contemplate a “black swan” to its benefit.
Mr. Luu Anh Tien stated that each occasion that occurs in Con Cung’s perspective is a chance. In 95% of the market share that doesn’t belong to Con Cung, it will likely be even tougher for a small anonymous retailer to handle in the course of the pandemic.
Retail chains which have an extended historical past of constructing manufacturers, making ready items and methods may have a place within the minds of consumers. Due to this fact, clients will instantly consider the model when there’s a want.
Mom and child retail is among the many important providers allowed to remain open in the course of the pandemic, which might be a blessing for any firm. Mr. Luu Anh Tien agreed with this however added that the accompanying problem was not small.
“The retail trade is inherently very low profit-on-sales, like Con Cung, the web revenue margin is simply about 3%. The pandemic causes all prices to skyrocket, even whether it is opened, if the corporate is just not nicely managed. may flip right into a gap very quickly.”
On the present time of separation, Mr. Tien stated that probably the most troublesome drawback is how one can ship items to clients.
“Clients have wants, however they can not go away their houses. Shipper cannot ship inter-district deliveries and need to test in, so it’s totally troublesome. Many instances our order is blocked, only a few hundred meters away however elsewhere. The county cannot ship both.”
To take care of this example, Con Cung used the shop employees themselves as shippers. Primarily based on out there buyer knowledge, the shop supervisor’s data is distributed to the shopper in order that the 2 events can work together and meet the shopper’s wants when mandatory.
Greater than a month now, 95% of Con Cung’s orders are self-shipped. However the self-made fleet of automobiles can not meet all of the demand. The mom and child retail chain receives a median of 10,000 on-line orders per day, in truth, solely delivers about 7,000 orders.
“We should always have been in a position to deal with all orders, however there are lots of locations the place the products are returned. We are attempting to determine how one can make it extra environment friendly. Not too long ago, Seize or Ahamove have been in a position to ship inter-district deliveries once more. once more, however the variety of drivers continues to be small.”
In keeping with Mr. Luu Anh Tien, the key to Con Cung’s capability to beat the pandemic comes from two issues: “The primary is the inspiration that the corporate has constructed earlier than, when it comes to manufacturers, items and methods. When the shops are all closed, clients will instantly bear in mind me. Second is the flexibleness to swimsuit the market, in all circumstances.”
Over 10 years since its founding, Con Cung is presently within the strongest development interval for a retail chain.
“For those who have a look at giant companies and companies, the final 20% of the time they made extra property than 80% of the time earlier than. So there are rules that by no means change. each growth follows a parabolic path. The primary time is to build up, after reaching scale, the corporate will develop in a short time,” stated Mr. Le Anh Tien.
Con Cung took the primary 5 years to seek out the usual mannequin, the subsequent 5 years accelerated, and the subsequent 2 years the chain’s objective is to succeed in $1 billion in income. The corporate intends to IPO by the top of 2023.
“I believe three issues have gotten us the place we’re at this time. The primary is dedication. The second is that the corporate actually sticks collectively. The third is focus. At Con Cuu, we now have to concentrate on every part we do. , not rambling”.
Basic Director of Con Cung additionally stated that the corporate’s success additionally comes from capturing three very clear shifting tendencies within the retail trade: from inexpensive to high-end, from conventional to fashionable retail (GT) to MT) and from offline to on-line.
The 2 founders Le Anh Tien and Nguyen Quoc Minh are each natives and have a strong technical background. Mr. Tien was once the captain of the Vietnam Robocon staff that gained the primary prize on the continental competitors. Minh holds a doctorate in pc science from the College of Georgia (USA). Due to this fact, Con Cung has carried out digitization proper from the early days of its institution. In the present day, when many companies are simply beginning to speak about digitization, Con Cung has grow to be automated.
The pandemic has brought about Con Cung’s direct clients to lower and the variety of on-line orders to skyrocket. Of 10,000 on-line orders per day, 75% come from cell apps.
Realizing that promoting based mostly on the precise web site is just not efficient, Con Cung has devoted its greatest assets to app growth, and launched it since 2019.
“Moblie app will flip clients into members, personalize customers, that is the development sooner or later. Presently, we now have about 1 million folks put in the app, including 2,000 – 2,500 new installs day-after-day. With the app, our clients can use it when shopping for offline in addition to on-line. Con Cung additionally integrates guarantee and buyer care providers on it…”
Con Cung’s on-line income is alleged to be roughly VND 200 billion per thirty days, accounting for one-third of the corporate’s whole gross sales. Earlier than the pandemic broke out, this charge fluctuated round 12-18%.
The overall director of Con Cung could be very assured about the way forward for mom and child chain.
To begin with, Con Cung has a worthwhile MT retail mannequin from a really early age. The expansion of the chain is now utterly based mostly on natural, not from elevating capital and masking losses.
Mr. Luu Anh Tien stated that opening a Con Cung retailer is worthwhile, albeit small. The necessary factor is that the corporate doesn’t need to cowl the loss for the brand new retailer.
“We found that the retail trade has an enormous development entice. Now that Con Cung has a model identify, the shop opens instantly and is all the time crowded. Our enterprise mannequin has been standardized. Prices opening a brand new retailer is roughly 1 billion dong Our system is automated, merchandise are localized in order that there is no such thing as a stock.
The present EBITDA of Con Cung is over 500 billion VND. The 12 months after the chain opens to 1,000 shops, our objective is a revenue of 500 billion. In any respect prices subsequent 12 months, we should dominate the market in order to not create loopholes for different companies to step in.”
When requested about opponents, Mr. Tien stated that he’s not too involved regardless of how massive they’re.
“I believe if I do one thing and nobody opens up like me, it proves that the trade is just not engaging sufficient. Competitors is a certainty, additionally a driving drive to assist us develop extra. What we do not. by no means neglect is positioning within the main place. We ensure that clients who give start have to think about Con Cung to purchase issues straight away. I nonetheless inform the employees, though it is the identical milk carton, how one can purchase at Con Cung drinks higher than shopping for elsewhere, that is success.”