Vmart poised to ex­pand in China

> BCorp’s sub­sidiary aims to hit RMB10b an­nual sales in three to five years

The Sun (Malaysia) - - SPEAK UP - BY EE ANN NEE

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.

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