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Wonderbuy sells in American style, goes bankrupted in Vietnamese style
For the first time in Vietnam, a Vietnamese American-styled retailer--Wonderbuy, has filed for bankruptcy. The story of Wonderbuy should be seen as a good lesson for home appliance retailers.
A miss is as good…
Wonderbuy supermarket, belonging to Hop Nhat Joint Stock Company, made debut one year ago. At that time, a lot of people, including reporters, once raised a question that why Wonderbuy decided to set up the retail premises at the crossroads of Nguyen Dinh Chieu-Dinh Tien Hoang, which both are one-way roads and located on the left side.
It is obvious that the disadvantageous position of the retail premises has badly affected the retailer’s business. There is not much traffic on Nguyen Dinh Chieu road, so it would be not too difficult to drop into the supermarket. However, the number of people going on the road and dropping into the supermarket was modest. It would be a big problem for the people going on Dinh Tien Hoang road to drop into the supermarket, because a lot of cars and motorbikes run on the road all day long.
It seemed that Wonderbuy was too self-confident with its retail biography as a brand of Hop Nhat Company. However, “Hop Nhat” was just a well-known name at the time when supermarkets and home appliance centers were small scale. Meanwhile, the list of “big guys” in the field in the last 5-7 years does not include Hop Nhat.
On the first days of operation, thanks to good media campaigns, Wonderbuy could attract a certain number of visitors. However, just some days later, the workers here voiced their complaints about the inconsistent management, and left the supermarket. They also pointed out that the supermarket followed an unprofessional method of displaying goods.
In fact, the complaints by workers show the lack of experiences in doing business in the retail sector.
With the huge investment sum of hundreds of billions of dong and the big business scale (Wonderbuy sold 70,000 home appliance and furniture products), it was clear that Wonderbuy planned to build up a large business empire. That explained why Wonderbuy still accepted the sky high rental of 25 dollar per square meter for the retail premises located on a disadvantageous position
The managers of WonderBuy initially planned to expand the distribution network with 23 computer, home appliance and furniture centers in big cities and key economic zones, a part of the plan to become a big electronics distributor in Vietnam within five years.
At that time, redoubtable rivals just smiled when hearing the announcement made by Wonderbuy. They seemed to be vigilant over experienced guys, while they were not afraid of the new comer like Wonderbuy.
However, Wonderbuy has been taking losses. In early 2011, Wonderbuy launched the “sale in American style” program. However, the program cannot help rescue the retailer who has to pay huge sums of money for retail premises.
… as a mile
It is the owners of Wonderbuy who best understand what are the reasons behind the failure. It is clear that the rentals for retail premises were overly high, and General Director of Hop Nhat Company admitted that the leasing contract showed “loopholes”.
Wonderbuy took a loss of 52 billion dong just after one year of doing business, which means that one billion dong went away every day. On May 24, Wonderbuy officially filed for bankruptcy.
The second reason behind the failure is the lack of experienced staff. The workers for the retailers could not earn high incomes, while they had to undertake too many kinds of works.
Meanwhile, the heads of divisions lacked long term vision and experiences, who changed their decisions so regularly that many workers had to leave. Besides, the noisy sale promotion campaigns, and the “sale in American style” really burdened the retailer.
However, a question has been left unanswered that why Wonderbuy does not intend to sell the brand? In fact, the loss of 52 billion dong, or 2.5 million dollars proves to make nothing to foreign big conglomerates.
vietnamnet, Doanh Nhan Saigon
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