Under the deal, The CrownX has a pre-money valuation of $6.9 billion, equivalent to $93.5 a share. Masan will own 80.2 per cent of the company post the consortium’s investment, the company announced.
Founded last year, The CrownX is Masan’s integrated consumer retail arm that consolidates its interests in Masan Consumer Holdings and VinCommerce (VCM), forming a consumer and retail powerhouse.
Masan is also in advanced discussions regarding a further strategic investment of $300 – 400 million into The CrownX from other investors, expected to close in 2021.
Danny Le, chief executive officer of Masan Group, stated: “This strategic partnership will accelerate our ability to achieve our goal of transforming The CrownX into a one-stop shop to serve consumers’ everyday needs, whether offline or online, “Point of Life”. Our immediate priority is to modernize Vietnam’s grocery market and develop an unparalleled consumer proposition from assortment to shopping experience.”
Janice Leow, managing director at Baring Private Equity Asia, believes this strategic investment has the potential to supercharge The CrownX’s growth in a nascent retail market and create the largest consumer ecosystem in Vietnam.
"As a long-term investor in the country, we think Vietnam has a long runway for growth supported by strong macroeconomic tailwinds and attractive demographics,” said she.
As part of Alibaba’s investment, The CrownX will now partner with Lazada, Alibaba’s South East Asia e-commerce platform, to build its digital presence and capabilities and accelerate the offline to online (“O2O”) market in Vietnam.
Besides, VCM will enter a strategic cooperation agreement with Lazada in which it will be the preferred grocery retailer of choice on Lazada in Vietnam. The parties will co-share know-how, co-develop analytics to develop grocery as a key online category.
Grocery accounts for 50 per cent of Vietnam’s retail market and 25 per cent of consumer wallet share and is of essential daily use, but online penetration is still nascent.
Masan has aspirations for The CrownX’s online gross merchandise value to account for at least 5 per cent of its total sales value in the upcoming years.