Vmart poised to expand in China
> BCorp’s subsidiary aims to hit RMB10b annual sales in three to five years
LANGKAWI: Chinese retailer Vmart (Tianjin) Trading Co Ltd, a subsidiary of Berjaya Corp Bhd (BCorp), aims to hit an annual RMB10 billion (RM6.22 billion) sales in three to five years, from RMB1 billion currently by growing its number of physical and online stores.
BCorp founder Tan Sri Vincent Tan said China has great potential and he is targeting 10,000 Vmart physical and online stores by 2018. With 420 physical stores in 29 provinces now, Vmart is currently opening at a rate of 100 stores per year in China. About 90% of its sales are generated from physical stores.
“We hope to increase our revenue and we have the opportunity to grow it over time. We think a five-year target is realistic and possible,” he told reporters at the Vmart Elites Langkawi Incentive Trip 2016 awards dinner here on Tuesday.
Vmart rewarded over 500 of its elite achievers with an incentive trip to Langkawi earlier this week, the first by the retail group. Vmart elites achieved monthly sales of RMB200,000 to qualify for the incentive travel.
Tan said Vmart wants to have both physical and online stores to cater to the two different groups of consumers.
“We try to cover every province, every city and every town, from first tier, second tier to third tier cities. We will also open many virtual stores because there are many people who wants to shop online.”
As an entrepreneur, Tan said, he has always seen the potential of the Chinese market.
“Five years ago, I decided to start Vmart in Tianjin. From one humble store, Vmart has grown to 420 stores with 1.5 million members. Vmart is now in 29 provinces and already a household name.”
He said BCorp has some properties and development in China but these projects are not big.
“In fact, we want to focus in China on Vmart. We think there is great potential to also invest in factories to manufacture products and to JV (joint venture) with foreign manufacturers of good quality products,” said Tan.
He said the Chinese consumers are now more matured with rising income and higher expectation, and Vmart, which has its manufacturing facility in China, needs to study the products that it wants to produce to ensure it is acceptable to the consumers there.
Tan wants Vmart to expand its 1.5 million members by 100 times to 150 million members in the future.
“It will take time but over the long term it is possible. We’re in this for the long term. We’re investing in this Vmart business. We will look and see how we can grow Vmart.”
Earlier, he launched the Vmart Million Club at the awards dinner, where 20 elite achievers succeeded in making it to the top. The recognition is the most prestigious title for Vmart members as one must achieve RMB1 million sales a year to qualify.
“Today, there are 500 Vmart elite achievers here (at the Vmart Elites Langkawi Incentive Trip 2016). In the next incentive trip, let’s hit 1,000 achievers,” said Tan.
Vmart chairman Liang Sook Sook told SunBiz that it plans to push online stores to account for 30% of its sales by 2018, compared with only 10% now.
She said Vmart plans to implement a commission structure for its online stores by June 2017, which will have a similar commission like its physical stores.
Vmart is the sole distributor of Cosway goods in China. Vmart’s bestselling products are air filters, water filters and health food products.
“We’ve a unique concept of merging online and offline (channels) to reach consumers. We’re working on more brand building to make ourselves more popular among the China brands,” said Liang.