HO CHI MINH CITY -- The retail arm of Vietnam's biggest information technology company FPT will list its shares on the Ho Chi Minh City bourse in the first half of next year, with the plan of using the proceeds over the next three years to open 100 stores officially licensed by Apple, marking a serious push by the U.S. tech group into the communist-led country.
FPT secured the country's first license from Apple in 2012 to set up a store network specializing in Apple products such as iPhone and Macbook under the brand name F.Studio. There are now 10 F.Studio outlets operated by FPT Digital Retail, also known more simply as FPT Retail, in Vietnam. Each of them showcase Apple products, which make up 40% of their in-store offerings. The retailer plans to increase this network tenfold.
The move to increase Apple's prescence in Vietnam follows a rise in sales in the country of unauthorized products -- goods that are bought overseas, then sold in Vietnam while avoiding import taxes. A recent local survey showed more than a third of Apple products in Vietnam markets were "unauthorized items", without a guarantee from the company. FPT Retail expects to provide more choice of officially imported items to meet the demand of Apple fans, who often travel overseas to buy the tech group's latest products.
Apple has set up a representative office in Vietnam, although no official Apple Stores yet exist there. Currently, sales of Apple products in the country are valued at $1 billion annually.
Apple iPhones accounted for 7% of the total 14 million smartphones sold in Vietnam last year, ranking third after Samsung Electronics (28%) and Oppo (25%), according to IDC Vietnam. But given the growing sales of unofficially imported products, Apple has appears to have decided to expand its retail network.
Currently, there are 15 Apple-authorized stores in Vietnam under the operations of local retailers, including FPT Retail's 10 F.Studio outlets and those of Mobile World Group -- a tiny fraction of those in Singapore (527), Thailand (480) and Indonesia (364).
The market listing date of FPT Retail will be no later than April 30, 2018, said Nguyen Bach Diep, general director of the retail arm, at an investor roadshow in Ho Chi Minh City on Friday.
Splitting from FPT's retail and distribution sector in 2012, FPT Retail grew to become the second biggest information and communications technology (ICT) retailer in Vietnam, currently holding 18% market share, after Mobile World Group with 45%. The three biggest shareholders in FPT Retail, as of November, were FPT group with a 55% stake, followed by Dragon Capital (20%) and VinaCapital (15%).
FPT Retail's nationwide store network will reach 480 outlets by the end of this year, up 25% year-on-year. The company aims to double its online sales by 2020, from 1.5 trillion dong ($65.8 million) this year. The main part of the business is its branded FPT Shop network, which sells mobile handsets, laptops and accessories from a wide range of brand names. The expansion of the F.Studio network is expected to enhance the performance in premier products, bringing higher yields.
FPT Retail targets $600 million in revenue and $12 million in net profit in 2017, representing respective year-on-year growth of 27% and 40%.
"We believe in the cooperation with Apple to open more Apple authorized outlets, before Apple opening its wholly-owned [Apple Store] in Vietnam," said Nguyen Viet Anh, deputy general director of FPT Retail, who has experience working with Apple in Singapore.
Since 2011, Nokia and HTC opened their own outlets in Vietnam, mainly focusing on promoting their brand in the country's biggest cities and offering product trials for users. To date, Oppo, Sony, Xiaomi and Samsung have all launched their own official stores.
FPT Retail also plans to expand into another business beyond ICT products, which is expected to be announced next year.
Observers said that FPT Retail had acquired some pharmacy stores, joining a new race with rivals such as Mobile World, which has also made moves into the retail pharmacy market.