SK invests in Vietnam's VinCommerce

SK South East Asia Investment Managing Director Park Won-chul, right, and Vice President Kwon Hye-jo, left, pose with Masan Group CEO Danny Le on screen at SK's building in central Seoul, Tuesday, after signing a deal about SK's investment in Masan's retail unit, VinCommerce. Courtesy of SK

By Kim Bo-eun

SK Group said Tuesday its subsidiary in Southeast Asia has invested in Vietnam's top retailer, VinCommerce.

SK South East Asia Investment acquired 16.3 percent of the firm's shares for 460 billion won ($410 million), as part of a strategic partnership with its parent company, Masan Group, SK said.

VinCommerce operates 2,300 convenience stores and supermarkets in the Southeast Asian country, and takes up a 50-percent share in Vietnam's retail market.

"We expect VinCommerce to grow into an omni-channel business, such as Alibaba or Amazon, that integrates online and offline channels," an SK official said. "Investment in the company is an investment in the future retail value chain of Southeast Asia, which is expected to see high growth."

Masan Group is Vietnam's largest business in the food and beverage industry, with affiliates also in financial services and mining. The group acquired VinCommerce from VinGroup in December 2019, purchasing 83.7 percent of the affiliate's shares. Masan Group has secured market dominance in various businesses by creating synergy with VinCommerce's strength in retail.

After the acquisition, VinCommerce's sales reached $1.4 billion in 2020, growing 30 percent year-on-year from $1.1 billion in 2019. VinCommerce's sales are expected to reach $1.8 billion this year. This sales increase is backed by an annual 25 percent growth of Vietnam's retail market for convenience stores and supermarkets.

SK Group set up a subsidiary for the purpose of investing in fast-growing businesses in Southeast Asia in August 2018. The investment firm acquired 9.5 percent of Masan Group's shares in October 2018, and 6.1 percent of Vingroup's shares in 2019. Vingroup is Vietnam's largest listed firm, with a wide range of businesses, including real estate development and retail. SK also acquired 24.9 percent of pharmaceutical business Imexpharm Corporation in May 2020.

With SK's investments in VinCommerce, it also secured additional investment rights in Masan Group's consumer business. SK is also looking into investing in logistics and electronic payment businesses related to its previous investments.

SK South East Asia Investment Managing Director Park Won-chul and VinCommerce CEO Truong Cong Thang took part in an online meeting marking the deal on Tuesday.

"Masan Group is the best partner for our success in the Vietnamese market," Park was cited as saying in a press release.

Truong Cong Thang said, "VinCommerce, based on customer-centered management, strengthened its sales network and improved sales efficiency. SK's investment will become a starting point for VinCommerce to make another leap in the Vietnamese market."