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Avoiding a meaningless price war in the electronics industry, FPT Shop "plays" a new segment: Boosting household goods to 15% of revenue after three years.

According to the 2023 plan, the FPT Shop chain will be cautious in expanding the system (this depends on market conditions and demand for goods). The company also offers promotional and price support policies to accompany customers in a challenging situations. It is expected that the profit margin in 2023 will be lower than in previous years.

Also read: FPT targets VND52,000-billion revenue in 2023 » Breaking News, Latest World News Updates - VietReader Viet Nam

This move comes amid a sharp drop in purchasing power. If at the end of last year, only people with average incomes and below tightened their spending, now people with money have also begun to "measure and measure" in purchasing non-essential goods and high-value goods. In addition, the group of installment customers also fell sharply due to the increase in interest rates and tighter consumer lending policies.

On the other hand, FPT Shop stated that it would continue to open and offer domestic goods to improve performance. The number of domestic stores has currently reached 300 and is planned to expand to 600 by the end of the year.

In 2022, the Company tested selling household goods and recorded positive signals. Sharing more deeply at the recent Annual General Meeting of Shareholders, a representative of FPT Retail (FRT, the company that operates the FPT Shop chain) said that the new segment of household goods is contributing 2.5% of FPT Shop's total revenue with a rather high gross profit margin of 20-25%. It is expected that in the next three years, this segment will contribute 15% of the total revenue of the FPT Shop chain.

This is also a means for FRT to discover new development drivers, given that the ICT industry no longer has a mutation factor and is particularly limited in its participation in the current price-cutting fight. Specifically: 

Firstly, with the ICT industry, if the economy was good before, customers changed their phones once a year, now it takes 2-3 years to change. Therefore, FPT Shop will no longer experience sudden growth despite maintaining a stable growth rate.

Secondly, the price war, the most obvious is that the iPhone price in Vietnam is currently the lowest in the world with such a selling price, most of the business parties are at a loss. "The question is, why is the loss still made?" said the FRT side, adding that it required more time to understand thoughtfully.

In the short run, when the sellers lower prices, FRT must also lower, but in the long term, FRT will expand the product line to limit this pointless price war.

"Obviously, during the difficult market process, there will be fights, but in the long run, they will only drag each other down, not eat each other. This price war we consider is not a good problem. But, in the short term, we will also lower the market to sell goods”, added Chairman Nguyen Bach Diep.

Many ICT companies soon encroached on household goods. In addition to the successful MWG with the Dien May Xanh chain, Digiworld 2021 has started selling Xiaomi-branded TVs. Digiworld joins forces with new partners Whirlpool, Eufy, and Joyoung in 2022, expanding its range to include refrigerators, washing machines, and clothes dryers...

Also read: VINASA selects Vietnam ICT actors » Breaking News, Latest World News Updates - VietReader Viet Nam

In 2023, according to the plan to have about 600 stores, about 200-250 household stores of FPT Shop will focus on smart home products. 

In addition, the Company also gradually expanded its product portfolio according to the shop-in-shop model. According to the report for this year, FRT may add a series of new industries such as selling motorcycles and motorbikes; maintenance and repair of motorcycles and motorbikes; selling spare parts and auxiliary parts of motorbikes and motorbikes; retail sale of bicycles and accessories in specialized stores; repair of bikes, watches, other personal and household goods, not elsewhere classified.


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