The Sherpa Company Limited, a subsidiary of the Vietnamese conglomerate Masan Group Corporation, has acquired a 20% stake in Phuc Long Heritage Joint Stock Company, the firm behind the local tea and coffee brand Phuc Long, for $15 million, according to an announcement.
As part of the deal, the Masan Group-owned retailer VinCommerce, which runs the VinMart supermarket chain, has entered into a strategic cooperation agreement with Phuc Long. Accordingly, both sides will jointly develop “Phuc Long Kiosk” through a network of more than 2,200 VinMart+ stores nationwide.
“I believe that in partnering with Masan, Phuc Long will unlock the next phase of its growth,” said Lam Boi Minh, founder of Phuc Long Heritage.
According to the strategic cooperation agreement with VinCommerce, Phuc Long Kiosk will share 20% of its revenue with VinMart+. Based on the results of the pilot model, this partnership will enhance the profit margin of the whole VinMart+ chain by more than 4% compared to the current level.
“In the near future, we hope to take Phuc Long tea and coffee brand global. This partnership also accelerates Masan’s strategy to develop the Point of Life consumer ecosystem,” said Truong Cong Thang, CEO of VinCommerce.
VinCommerce, besides running the largest nationwide grocery retailer VinMart, also operates the minimart chain VinMart+ and VinEco, one of the largest vegetable and fruit brands in Vietnam.
In 2019, Vietnamese behemoth Vingroup entered into an agreement to merge its retail and agriculture units with Masan Consumer Holding, a subsidiary of the Masan Group, to form the country’s largest consumer platform.
Under the agreement, VinCommerce, which was Vingroup’s retail unit, and agriculture unit VinEco merged into Masan Group. After the transaction, Masan set up The CrownX platform by consolidating its interests in Masan Consumer Holdings and VinCommerce.
Last week, Masan announced that a consortium led by Alibaba Group and Baring Private Equity Asia acquired a 5.5% stake in The CrownX.
The transaction pegs the pre-money valuation of The CrownX at $6.9 billion. Following the investment by the Alibaba-led group, Masan will own an 80.2% stake in the company.