HANOI -- Vietnam's largest real estate company Vingroup is set to exit from directly operated retail outlets as it will close its electronics retail store network within the month.
Vingroup said on Wednesday it would move away from "direct retail" businesses to optimize resources. The group will continue operating Vincom Retail, which leases real estate units to retailers and runs large shopping malls.
The latest move to shut down VinPro, Vingroup's home appliance retail chain with about 80 stores, came two weeks after the conglomerate said it would withdraw from supermarket and convenience store operations as it merged its consumer businesses with Masan Group, a rival business group. Masan will take control of the merged company while Vingroup will remain as a shareholder under that deal.
Vingroup's finance report posted loss in retail segment which includes operations of supermarkets, convenience stores, electronics chains and Adayroi, group's e-commerce site for the past few years. Pretax losses were at 3.7 trillion dong and 5.1 trillion dong in 2017 and 2018, respectively," according to the group's documents. Vingroup posted revenue of 121.8 trillion dong and net profit of 6 trillion dong in 2018.
VinPro's closure is in line with Vingroup's strategic move to focus on tech and manufacturing. In early December, Vice Chairman and CEO Nguyen Viet Quang told the Nikkei Asian Review that "Vingroup decided to change the growth strategies in order to focus on technology and industry, with global expansion aspirations."
The company recently began TV production which follows last year's launch of a smartphone brand and the rollout of Vietnam's first homegrown car brand in June.
In 2017, Vingroup announced it would enter the auto industry and smart devices manufacturing businesses. It rolled out its first VinFast brand car in June.
VinSmart brand smartphones are now sold not only in Vietnam but also available in Spain, Myanmar and Russia. Smart TVs made their debut in Vietnam last weekend, while other devices including fifth-generation smartphones and connected home appliances are in the pipeline.
Vingroup also plans to deliver its first electric vehicles in 2020. In an interview with Bloomberg News last week, Pham Nhat Vuong, Vingroup founder and chairman, said he is keen to invest as much as $2 billion into electric vehicles, hoping to export VinFast EVs to the U.S.
Local analysts said VinPro, which entered the market in 2015, couldn't compete with other rivals, including the Dienmayxanh chain which has more than 1,000 outlets in the country.
"Except real estate, other segments of Vingroup are about to end their investment period and start the [so-called] mining period, so Vingroup will have to choose to ease its pressure of maintaining profits for both retail and industrial segments," according to Anh Pham, an independent business growth and strategy adviser.