Vietnam retailer Mobile World eyes Indonesia JV’s IPO after 5 years

Vietnamese retail giant Mobile World Investment Corp. (MWG), which has invested $7.3 million in an Indonesia joint venture, expects it to make an initial public offering (IPO) after five years.

Era Blue, the joint venture between MWG and Erafone, one of Indonesia’s largest tech product retailers, has opened its first brick-and-mortar shop. The Vietnamese corporation holds a 45 percent stake in the partnership.

Indonesia’s current population of more than 280 million is 2.8 times higher than Vietnam’s. Erafone operates a network of more than 1,200 outlets selling telecom equipment, tablets, laptops and other products.

Van Hieu Em, Mobile World chain CEO, said the new joint venture expects to gain a market share of 20-40% in Indonesia over the next five years and follow this up with an IPO. Era Blue plans to open four more stores by the end of this year.

Indonesia is MWG’s second overseas market in Southeast Asia. The group entered the Cambodian market in 2017 by opening the BigPhone chain, later renaming it Bluetronics.

With a network with 50 stores in Cambodia, Bluetronics has become the largest electronics retail chain in the neighboring country.

MWG has sought to make its presence in Cambodia and Indonesia lead to higher sales growth rates than in Vietnam, where the group has been testing multiple retail concepts.

It launched clothing and jewelry under the AvaFashion, AvaSport, AvaKids and AvaJi brands, apart from opening the AvaCycle bicycle store. The last one was incorporated into the retailer’s Dien May Xanh home appliances chain.

The group closed the AvaFashion business in June.

MWG estimates its 2022 profit at VND4.4 trillion ($177.6 million) or 90% of last year’s figure, group chairman Nguyen Duc Tai said at a meeting with investors last week.

“This is the first year Mobile World has seen its profit go down,” he noted. However, he also expected the group to achieve its revenue growth target.

In the first 10 months of 2022, MWG earned VND113.71 trillion ($4.59 billion) in revenues and VND3.84 trillion ($155 million) in profits, both figures higher year-on-year, equalling 81% and 60% of this year's plans, respectively.