Mobile World: The Phone Retailer That Tried to Sell Groceries

Mobile World Group is what happens when a company that has perfected one retail format assumes the format is the business, and then discovers that groceries are not phones. Founded in 2004 by Nguyễn Đức Tài and four partners, financed by Mekong Capital in one of the most profitable private-equity deals in Asian history, it became the country’s dominant seller of smartphones and consumer electronics by the mid-2010s. It then spent the better part of a decade and a great deal of shareholder money learning how to sell vegetables. This article explains the phone business, the electronics pivot, the grocery experiment and the 2023 crisis, and what the company’s recovery says about scaling retail in a market that is still half traditional. It is part of the Vietnam Company Stories hub.

How did five friends and a private-equity fund build Vietnam’s biggest retailer?

By combining a founder who obsessed over store operations with an investor who insisted on management systems. Nguyễn Đức Tài and his co-founders opened the first Thế Giới Di Động (Mobile World) store in Ho Chi Minh City in 2004, at a time when phones were sold from market stalls and small independent shops with no price transparency.

The format was simple: a bright, standardised store of a few hundred square metres, every model on display with a fixed price, trained staff on commission and a website that listed the same prices. The company grew to a handful of stores and then, in 2007, took an investment from Mekong Capital, the Vietnamese private-equity firm led by Chris Freund, which bought roughly a third of the company for about $3.5 million.

Mekong Capital’s contribution was more than money. The fund pushed the founders to adopt a formal management structure, an ERP system, key performance indicators for every store and a culture programme that later became a case study in Vietnamese management. Store count went from around 7 at the time of the investment to more than 1,000 within a decade. When Mekong exited fully in 2018, its return was reported at roughly 57 times its investment, which remains the most cited private-equity outcome in the country.

The listing on the Ho Chi Minh Stock Exchange in 2014 gave the company a public currency and a large foreign shareholder base; for years it was one of the few Vietnamese stocks at its foreign ownership limit, and it traded at a premium that reflected its growth. Nguyễn Đức Tài stepped back from the CEO role in 2019 and remained chairman, with day-to-day management passing to long-serving executives.

Why did the company move from phones to fridges?

Because the phone market saturated and the same store-opening machine could be pointed at a bigger category. Điện Máy Xanh, the consumer electronics chain, began as an online store in 2010 and became the group’s largest revenue contributor within a decade.

Smartphone penetration in Vietnam rose rapidly through the 2010s and by around 2017 the market had shifted from first-time buyers to replacement cycles, which meant slower growth and thinner margins. Mobile World had already claimed roughly half of the organised phone retail market, and further store openings produced cannibalisation rather than growth. Consumer electronics, from televisions and refrigerators to air conditioners and washing machines, was a larger market with lower modern-trade penetration, and it was dominated by independent dealers and a few chains such as Nguyễn Kim, which Central Group bought in 2015.

The company applied its phone-store formula to electronics with two adjustments: larger stores, and a mini format for provincial towns that stocked a narrower range and doubled as a phone shop. Điện Máy Xanh grew to more than 2,000 outlets and, by the group’s reporting, took a share of organised electronics retail comparable to its phone share. The phone and electronics chains together produced most of the group’s profit during the 2010s and funded the grocery experiment.

The move also revealed the model’s dependence on category growth. Once electronics too matured, around 2022, the group had two large chains in slow-growth categories, and the pressure to find the next engine grew accordingly. The same dynamic can be seen across Vietnamese consumer businesses, including in the very different story of Honda’s motorbike dominance, where a saturated category forced strategy changes.

What happened when a phone retailer tried to sell groceries?

It lost money for nine years. Bách Hóa Xanh opened its first minimart in Ho Chi Minh City in late 2015 on the theory that the company’s store-opening machine, supply-chain systems and brand could take share from wet markets and from foreign minimart chains. The theory was half right.

The half that was right was demand. Vietnamese urban households were ready to buy packaged goods and some fresh produce from a clean, air-conditioned store near home, provided prices were close to the market. Bách Hóa Xanh grew from a few dozen stores to more than 1,700 by 2021, and revenue per store rose steadily in the years before the pandemic. During the 2021 lockdowns in Ho Chi Minh City, the chain was one of the few reliable sources of food for many neighbourhoods, and sales spiked, though so did complaints about pricing and stock-outs.

The half that was wrong was economics. Groceries have gross margins of around 20 percent against 15 to 20 percent for phones and rather more for electronics accessories, but the cost structure is entirely different: fresh produce spoils, logistics require cold chain and daily delivery, and a store that is too far from the distribution centre is a permanent loss. The company opened aggressively in provincial towns across the south in 2020 and 2021, including sites in rural districts where volumes never materialised. Losses widened each year and, by 2021, were on the order of several trillion dong.

The lesson that groceries reward density rather than reach was learned expensively. By comparison, Masan’s WinCommerce, described in the Masan Group story, inherited a similarly overextended network and cut it back in 2020; Mobile World waited until 2022.

How bad was 2023, and how did the company recover?

Bad enough that annual net profit fell to under VND 200 billion from more than VND 4 trillion the year before, and recovery came from closing stores, cutting costs and a price war the company chose to fight rather than avoid.

Several things went wrong at once. Consumer demand for phones and electronics collapsed in late 2022 and through 2023 as export-sector layoffs hit incomes and households cut discretionary spending; the electronics market shrank by a double-digit percentage. At the same time FPT Shop and other competitors launched aggressive price campaigns, and Mobile World responded with its own, under the slogan that its prices were too cheap to be ignored, which protected market share but destroyed margins. The group closed roughly 200 phone and electronics stores during the year and shut its Cambodian electronics chain, Bluetronics.

Bách Hóa Xanh was being restructured in parallel. In 2022 the company replaced the chain’s leadership, closed around 400 stores, mostly in poor provincial locations, refocused on Ho Chi Minh City and the surrounding provinces, and rebuilt the assortment around fresh food, which by then made up roughly 40 percent of store sales. Revenue per store rose by more than 50 percent from the trough. By the fourth quarter of 2023 the chain was near break-even at the store level, and in 2024 it reported its first full-year net profit.

The 2024 recovery was sharp: group net profit rose to around VND 3.7 trillion on revenue of roughly VND 134 trillion, with Điện Máy Xanh benefiting from a hot summer’s air-conditioner demand and Bách Hóa Xanh contributing positively for the first time. The company also brought in an outside investor for the grocery chain, with China-based CDH Investments agreeing to buy about 5 percent in 2024, which gave the unit a valuation and a path to a separate listing.

What is Mobile World trying next?

A pharmacy chain that has not worked, a children’s goods format that has been scaled back, and an electronics joint venture in Indonesia that is growing. The group’s appetite for new formats has been curbed by the 2023 experience, but not eliminated.

An Khang, the pharmacy chain acquired in stages from 2017, was expanded to more than 500 stores in 2022 in a bid to compete with Long Châu, the FPT Retail pharmacy business, and Pharmacity. It has been loss-making and the group closed a portion of stores in 2024 and 2025 while it searched for a working model; Long Châu’s success with a larger-format, prescription-led store has been hard to replicate. AVAKids, a mother-and-baby format, was launched in 2022 and then trimmed to a handful of stores plus online sales.

The Indonesian venture is more promising. EraBlue, a joint venture with Indonesia’s Erajaya group launched in 2022, applies the Điện Máy Xanh mini-store format to Indonesian provincial cities, a market with a similar mix of independent dealers and low modern-trade penetration. The chain passed 100 stores in 2025 and management has said it reached profitability at the store level; it is the first credible international expansion by a Vietnamese retailer.

Online has been a persistent weakness. The group’s websites generate meaningful traffic, but the growth of Shopee, Lazada and TikTok Shop has moved a large share of phone and small-electronics purchases to marketplaces where price is the only variable. The company’s answer has been to compete on price and service, delivery and installation for large appliances, rather than to build a marketplace of its own. Vietnamese e-commerce more broadly is covered in the story of MoMo and the e-wallet war, which shows how much of the digital consumer layer has been captured by platforms rather than retailers.

What does Mobile World’s story mean for founders and operators?

That a scalable store format is a capability, not a strategy, and that the discipline to close stores is worth as much as the ability to open them. The company’s best decisions have been about stopping: shutting Bluetronics, cutting Bách Hóa Xanh by a quarter, trimming An Khang.

For founders, the Mekong Capital chapter is the clearest lesson. The fund’s money mattered less than the operating systems it insisted on, and the company’s later ability to open a store a day without losing control came from the ERP, KPI and training systems put in place when it had fewer than ten stores. Building the systems before the scale is the reason Mobile World survived its expansions when many Vietnamese retailers did not.

For operators, the grocery chapter is a warning about assuming transferability. The company’s phone and electronics expertise, negotiating with Samsung and Apple, managing inventory turns and training sales staff on commission, was of limited use in fresh food, where the skills are procurement from farmers, cold-chain logistics and waste management. The turnaround came when the group hired grocery specialists and gave them control.

For investors, the 2023 crisis is a reminder that the company’s earnings are cyclical, with high operating leverage from a network of thousands of leased stores. In good years the leverage works in shareholders’ favour, as 2024 showed; in bad years it does not. Valuing Mobile World as a steady compounder has repeatedly proved a mistake, and valuing it as a cyclical retailer with a growth option in groceries has been closer to the truth.

How does Mobile World compare with FPT Retail and the foreign chains?

It is larger than any domestic rival and more focused than the foreign conglomerates, but it has lost the initiative in the two categories, pharmacy and online, where the next decade of growth may lie.

FPT Retail, the retail arm of the FPT technology group, runs FPT Shop, a smaller phone chain, but its Long Châu pharmacy business has become the most successful new retail format in Vietnam since Bách Hóa Xanh, passing 1,500 stores and generating profit at a scale An Khang has not approached. In pharmacies, Mobile World is a distant third.

Against the foreign chains, Mobile World’s advantage is cost. Its stores are cheaper to fit out, its staff are managed more tightly and its logistics are built for Vietnamese roads and lease terms. Central Retail, Aeon and Lotte run larger formats with higher fixed costs, and their minimart efforts have been modest. The convenience chains, Circle K, GS25, 7-Eleven and FamilyMart, compete for a different, younger customer and a different basket, one that increasingly includes a takeaway drink from the coffee chains next door.

The comparison that matters most is with WinCommerce. The two minimart chains reached profitability within a year of each other, with WinCommerce stronger in the north and rural areas and Bách Hóa Xanh in the south. Both have said they will open hundreds of stores a year; both will be constrained by the same rents, the same staff shortages and the same wet-market competition. The grocery war between them will define Vietnamese food retail for the rest of the decade.

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