“Index Living Mall Public Company Limited (ILM)” made a significant advance in foreign markets by debuting a new franchise in Vietnam to take advantage of the economic boom in the country, with the opening of the first branch in Ho- Chi Minh City on November 1, 2019. The second branch is set to open this December as the sustained investment plan was put in place. The Company also expressed full confidence of enthusiastic response due to the tremendous growth factor in the real estate and furniture markets in Vietnam that will support its foreign market strategy as well as the Company’s overall sales performance.
Miss Kridchanok Patamasatayasonthi, Managing Director of Index Living Mall Plc. (ILM), Thailand’s leading integrated retailer of home furnishings, revealed that the Company has set a policy to continuously expand its furniture business abroad under the franchising model with local foreign partners, a model that emphasized the cooperation with local operators who are experts in each of the markets without the Company having to bankroll directly after having invested continuously in the Thai market. This is meant to diversify the investment in other countries with high potential and growth opportunities which will help to enhance the Index Living Mall brand to become popular and more well-known among consumers in each of the countries, as well as to eventually elevate the merchandise to become a global brand.
Currently, 16 franchise branches have already been operational in seven countries, namely, Indonesia, Nepal, Maldives, Lao PDR, Cambodia, Pakistan and Myanmar. Most recently, the Company has penetrated the Vietnamese market where the economic growth has been phenomenal continuously for the past several years. This development will also serve to boost the franchise business in foreign countries and the overall sales prospect of the Company.
The company granted franchise status to VI Furniture Joint Stock Company, a subsidiary of Vietnam Investment Group (VI Group), a leading operator in the retail, food, drinks, fashion and electrical appliances businesses. Furthermore, franchisee also recruited on board an experienced team in furniture retail to manage the business specifically. The first stand-alone furniture retail center spreading out over 990 square meters of floor area was opened on November 1, 2019 on Nguyen Thi Minh Khai Road in Ho Chi Minh City – a well-known road lined with furniture and home decoration shops. The official inauguration of the store will take place by the end of November this year.
In December 2019, the local partner in Vietnam has a follow-up plan to open the second store also as a stand-alone with a floor area of 800 square meters in Ho Chi Minh City. In addition, a plan is already in place to continuously launch new branches with a total of six stores within 2020 which will be located within high potential shopping and commercial areas with floor spaces ranging from 600 to 1,000 square meters.
“The franchise expansion in Vietnam will culminate in two revenue streams for the Company – one is the Royalty fee for selling rights and the other is the profit from the sales of merchandise to the franchisee. The expansion of franchise business in Vietnam should receive good response and would create a new experience in choosing to buy products and services in connection to furniture and decorative items. Also, the store will become an excellent choice that can fulfill the needs for home decorations for the Vietnamese consumers,” Miss Kridchanok Patamasatayasonthi said.
The ILM Managing Director, said further that Vietnam is a high potential country that has been exponentially expanding with an economic growth of 6-7 percent for the past several years. It has a population of 96 million or almost 27 million households, and also a population with a high percentage of young adults. The average national income per capita now stands at US$2,551 with a sustained growth mirroring the economic boom.
The current overall picture of the furniture market in Vietnam shows a total market value of US$5,500 million as buoyed by the real estate business that has been growing continuously for the past five years at an average 10.7 percent per annum, particularly the real estate projects in the medium and premium brackets that have been growing well. Where the trend for the next five years is concerned, the overall picture of Vietnam’s real estate market should show continuous growth, albeit at a slower rate. However, the sector will remain an important factor to stimulate the demand for furniture for home decoration and to remodel houses, as well as for improved quality of life.
“At present, the Vietnamese are receptive to many styles of furniture, such as Scandinavian, contemporary, etc., and are attentive to functions that will support a more comfortable lifestyle. Meanwhile, Index Living Mall is one of the imported furniture brands that are popular and more well-known among Vietnamese consumers, with a wide variety of selections, such as bedroom set, living room, dining room and kitchen, sofa, bed, etc. Therefore, the Company is confident that the franchise expansion in Vietnam will become another foreign market where sales growth will be remarkable,” Miss Kridchanok Patamasatayasonthi concluded.