BIZ BUZZ: Walk in the wholesale conversation

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Lots of people on the local business scene pay lip service to the virtues of wholesale, but few are willing to build a business model that aims to make bulk purchases cheaper for people than retail sizes, it seems.

That is, by the time MerryMart Consumer Corp. starts its consumer wholesale business. This month, which Biz Buzz learned about, the first deliveries to customers were made on Monday.

Everyone already knows MerryMart’s grocery retail trade, after all, the industry in which Edgar “Injap” Sia II’s family had their humble beginnings.

But the young billionaire doesn’t stop there and has now taken this business model to the next logical level with MerryMart Wholesale.

And why not? In Luzon alone, the entire wholesale market is estimated at over 100 billion pesos. And thanks to its “first mover” advantage, MerryMart Wholesale will capture a significant market share in the near future.

His “secret sauce”? Customers can order in large quantities via the online portal www.merrymartwholesale.com.

MerryMart’s combined revenue from its retail and wholesale channels should enable the company to grow in volume quickly.

Currently, none of the three largest grocery chains has their own online wholesale delivery platform that offers purely piece by piece (as the smallest storage unit). As such, merrymartwholesale.com is the very first company in the Philippines to be a fully dedicated, integrated online platform for the wholesale grocery.

More importantly, we’ve looked at their prices and found that the difference between buying at retail and buying in bulk through this platform is close to 10 percent of the cost savings. This is remarkable given the current economic environment in which companies are looking for ways to reduce costs.

In theory, even companies can save money if corporate headquarters buy their consumables and office supplies in bulk through this portal.

The same is true of high-consumption households, many of whom regularly consume more than a box of toiletries and cooking ingredients a month.

To ensure the success of this company, MerryMart will set up additional distribution centers in DoubleDragon’s CentralHub warehouse complexes to support its retail stores and serve the wholesale market in different parts of the country.

With this model, Sia envisages that the frequency of grocery shopping in households can be reduced to once a month and at the same time over 10 percent costs can be saved by only having a few minutes to order individual cases via MerryMart Wholesale.

In the same way, disaster-responsive individuals, businesses, or local governments can easily order 20 cases of bottled water, 25 cases of instant noodles, 25 cases of alcohol, or 25 cases of sardines for next day delivery, all online.

And with the start of the official 2022 election campaign season, it is expected that political candidates who need the same supplies in large quantities will also use this portal.

If that’s not Sia’s foresight, we don’t know what is.

—Daxim L. Lucas

AllDay listing

All eyes on the stock exchange are on today’s listing of the grocery chain AllDay Marts Inc. owned by billionaire Manuel Villar, which is traded under the ticker “ALLDY” after an overwhelming response, especially from private investors.

“We are very pleased to be making the AllDay experience available to the public. We have long believed that Filipinos deserve a better supermarket experience that rivals the best in the world, and this Initial Public Offering is helping us do just that, ”said Villar.

“When we priced the IPO [at 60 centavos each], we did this with the aim of maximizing long-term value for our new institutional and retail investors. The lively market acceptance of our share confirms this price and we are very pleased and grateful for the positive reception of the AllDay IPO. This confirms that many share our vision of transforming the supermarket landscape and that many believe in AllDay’s ability to bring an upscale supermarket experience to an increasing number of Filipinos across the country. “

As a reminder, demand from the retail tranche reached 10 times the allocation, while the allocation to retail local investors (LSI) reached 1.62 times the limit – the first time the LSI ratio has been exceeded. Due to the oversubscription, 1,781 investors have to be refunded for the additional order. In the institutional tranche, the offer was 2.5 times oversubscribed.

Since this is the first time this LSI overflow has occurred, how will the refund be processed? It is not based on a first-come-first-served basis. In most cases, those who ordered P201,000 and less (versus a maximum grant of P300,000) received a full grant, while those who ordered more than P201,000 received only a partial grant. Hence, demand from retail investors continued to be a priority.

PNB Capital acted together with BDO Capital and Investment Corp. and China Bank Capital Corp. as Joint Lead Underwriter and Joint Bookrunners for this successful IPO debut worth 4.53 billion pence.

At the time of listing, ALLDY will have a market capitalization of Pesos 13.71 billion, compared to some of its “Pure Play” supermarket counterparts such as MerryMart and Puregold Price Club, which are valued by the market at Pesos 24.61 billion and Pesos 121.8 billion, respectively .

—Doris Dumlao-Abadilla INQ

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