The race to distribute watches of PNJ and Mobile World

The two retail businesses announced an attack on the watch distribution business earlier this year to increase sales for existing stores.

The analyst of a securities company in Ho Chi Minh City said that there are many factors to explain the similarity of the time when Phu Nhuan Jewelry (PNJ) and Mobile World (MWG) expanded their business. this joint.

Firstly, the watch market is in a turbulent but equally fertile market because no business has led or at least accounted for more than 20% of the market share. Secondly, increasing consumer income and owning a watch as a kind of jewelry are a prevailing trend. Finally, the most important reason, both businesses need a support for the future in the context of the main business lines showing signs of slowdown.

Thanks to the retail platform, PNJ and MWG have many similarities in the plan to increase customer flow and coverage. Two businesses often discount 20-40% of the listed price to attract customers who have purchased goods in the system. In addition, the two are pursuing a shop-in-shop model to take advantage of the number of customers available in stores instead of opening stand-alone outlets.

As of the end of September 2019, PNJ sells watches at 20 shop-in-shop stores, a store in the mall and a flagship store to promote the brand and introduce a high-end experience. The company aims to have 35 stores by the end of the year and double the following year, while developing an online sales channel.

This plan is considered by the observers to be quite cautious because PNJ has entered the market since 2012 and spent almost the entire time to observe and test.

Sharing at the annual meeting last year, Ms. Cao Thi Ngoc Dung – PNJ President said that it is very difficult to dominate this market because smuggled imported goods are sold publicly, high official import tax … The implementation schedule is long. In the period of 2013-2018, watches only brought a total of about VND 100 billion and accounted for a modest proportion in the revenue structure.

In contrast to this slow and solid strategy, MWG showed great ambition as soon as it entered the market. The enterprise first tested at 2 stores, then increased to 42 stores in 3 months and the latest published data was 134 stores.

At the recent investor meeting, Mr. Doan Van Hieu Em – the head of the unit operating two retail chains of phones and electronics of MWG, said that the company is speeding up to complete the plan of 250 copper selling points. lake at the end of the year. The mission by the middle of next year will increase to 500 points of sale, expanding to the North and the Central.

According to Phu Hung Securities Joint Stock Company, the biggest difference in the market share race of these two enterprises is customer segmentation. PNJ aims to serve middle and high-end customers such as jewelry, while MWG only focuses on “pocketing” of the average number of customers entering and leaving phone and electronics stores.

This is reflected in the price spectrum of more than 1,000 PNJ watches that are distributed quite widely, ranging around VND 2-95 million. The company also developed its own brand PNJ Watch and promoted to become the exclusive distribution partner of some Swiss watch brands. Meanwhile, MWG mainly sells popular models of Michael Kors, Fossil, Casio, Baby-G … with the price of no more than 6 million.

After half a year of announcing its efforts in the watch segment, the situation turned to be more favorable for MWG, eliminating the difference in starting points when it first entered the market.

The board of directors of this business said that, on average, each store is selling more than 500 units per month, bringing about 1 billion dong in revenue but still not exploiting the market capacity. In addition to existing growth, selling more watches helps stores grow on average about 10%. This industry is expected to contribute about VND 600 billion, equivalent to 0.5% of the total annual revenue.

“We are importing watches through distributors as the first phase of testing other products. Next time we can work directly with the manufacturer to better profit margins,” said Mr. Hieu.

On the other side of the front line, PNJ rarely shares information about this business, in addition to the number of stores and forecasts “watches with promising prospects to break out in 2019”. The analysis of the business results for the first 9 months of this business said that other revenues (besides gold bars, gold and silver jewelry) also accounted for 0.5% of revenue. Assuming the entire clock array comes from, the maximum number is approximately 6 billion.

Meanwhile, according to SSI Securities Joint Stock Company, the watch segment in the first half of the year recorded a record revenue growth of more than 300% over the same period. The goal is to reach about VND 200-300 billion by 2022, 10 times the current scale. This expectation is not impossible, especially when the company has a strong brand and has solved the problem with the ERP system (roughly translated: enterprise resource planning system). This is a comprehensive business management solution system từ sản xuất, mua bán hàng, kế toán, phân tích dữ liệu… nhằm tối ưu quy trình vận hành, quản lý hao hụt và tiết kiệm chi phí.