FPT Digital Retail is one of companies will benefit the most from the sharp increase in demand for genuine Apple products and laptops.

A critical driver for retail companies

At present, browsing and researching products are done mostly online instead of offline. At the same time, the share of spending that goes to offline channels is shrinking, according to research by Facebook and Bain & Company. At least 80% of the channels used by consumers are online in the first two stages of the consumer journey—the discovery stage and the evaluation stage. Browsing products, comparing items, checking reviews, and conducting research are now mostly done on channels like social media, ecommerce websites, brand-owned websites, and videos. But in the final stage of the consumer journey, shopping online is only starting to capture an increasing share of sales.

For retailers, VNDirect believes that an omnichannel strategy to complete the consumer journey is the right strategy to boost listed retailers and distributors’ revenue. According to data from iPrice, Shopee and Lazada are the leading e-commerce sites in Vietnam, with monthly visits in 3Q21 of up to 77.8 million and 21.4 million, respectively. Therefore, putting stores on e-commerce sites will help retailers and distributors expand their customer base and increase sales in the near future.

With this trend, VNDirect expects companies that have invested in and built a good online platform, built community pages, and diversified sales channels on ecommerce sites to benefit from the omnichannel trend, in which MWG and PNJ are prominent retail companies.

Growing demand for authorized distributed products

Although the mobile phone market has been gradually saturated with growth of only around 5-7% p.a in the period 2019–2021, VNDirect believed authorized mobile phone distributors would maintain higher growth due to: (1) demand for high-end products being less affected by the pandemic; (2) tightening of hand-carrying regulations helping authorized retailers tap more share from individual retailers; and (3) tightening of hand-carrying regulations helping authorized retailers tap more share from individual retailers.

A survey shows only 30.7% of households have computers (including desktops and laptops), showing that the computer market still has great growth potential, especially in the pandemic and post-pandemic periods when the demand for computer products will strongly increase thanks to the need for work-from-home and entertainment.

Given these trends, VNDirect anticipates that MWG and FRT will benefit the most from the sharp increase in demand for genuine Apple products and laptops, while DGW and PSD will benefit from the distribution phase in which these products are distributed to retailers.

Shift in consumption toward modern sales

According to Kantar Worldpanel, in mid-October 21, the market shares of online channels and minimarkets fell back to around 10% and 6%, respectively, after peaking during the August-September 2021 period. However, the market shares are still at a high level compared to pre-epidemic (about 3% for online channels and 5% for minimarket channels), which shows the ability to maintain operations during the social distancing period of these channels and a shift in consumer trends after the pandemic.

According to the Ministry of Industry and Trade (MoIT) projections, by FY25F, the added value of the domestic trade sector will contribute about 13.5% of GDP, and the total retail sales of goods and services will rise by about 9-9.5% p.a. in FY21–25F. The proportion of total retail sales of goods by modern trade will reach about 35-40% by 2025. With MoIT's plan, the modern trade can maintain a growth momentum of over double digits throughout the period 2021–25F.

Therefore, enterprises with modern sales chains will maintain their growth momentum better than other channels. VNDirect believes MWG is a leading stock in this trend as they build modern retail chains like Bach Hoa Xanh in the south of Vietnam.