BIZ BUZZ: Walking the wholesale talk
Many people in the local business scene pay lip service to the virtues of wholesale trade, but few are willing to build a corporate model seeking to make it cheaper for people to buy in bulk than in retail sizes, it seems.
That is, until this month’s launch of MerryMart Consumer Corp.’s wholesale consumer business, which Biz Buzz learned, made its first deliveries to clients on Monday.
By now, everybody already knows about MerryMart’s retail grocery business, which is after all, the industry where the family of Edgar “Injap” Sia II had its humble beginnings.
But the young billionaire isn’t stopping there and has now taken this business model to its logical next level with MerryMart Wholesale.
And why not? In Luzon alone, the total wholesale market is estimated to be worth over P100 billion. And MerryMart Wholesale is set to capture a significant market share over the near term, thanks to its “first mover” advantage.
His “secret sauce?” Customers can order in bulk through its online portal www.merrymartwholesale.com.
The combined revenues of MerryMart derived from both its retail and wholesale channels should enable it to grow its volume fast.
Currently, none of the top three grocery chains have a dedicated online wholesale delivery platform that purely offers by the case (as its smallest stock keeping unit). As such, merrymartwholesale.com is the very first venture in the Philippines to be a fully dedicated wholesale grocery online integrated platform.
More importantly, we took a look at their prices and saw that the difference between buying retail and in bulk through this platform is in the vicinity of 10 percent in cost savings. That’s substantial, given the current economic environment where companies are looking for ways to reduce costs.
In theory, even companies can save money if corporate head offices buy their consumable groceries and office supplies in bulk through this portal.
The same can be said of high consumption households, many of which regularly consume over one case of toiletries and cooking ingredients a month.
To ensure this business venture’s success, MerryMart will set up additional distribution centers in DoubleDragon’s CentralHub warehouse complexes to support its retail branches and cater to the wholesale market in various parts of the country.
With this model, Sia envisions that the frequency of households buying groceries can be reduced to once a month and, at the same time, save over 10 percent on expenses with few minutes of time ordering by case via MerryMart Wholesale.
In the same manner, people, companies or local governments responding to calamities can easily order for delivery the following day 20 cases of bottled water, 25 cases of instant noodles, 25 cases of alcohol or 25 cases of sardines, all online.
And with the official 2022 campaign season about to start, political candidates needing these very same supplies in bulk are expected to use this portal, too.
Now if that isn’t foresight on the part of Sia, we don’t know what is.
—Daxim L. Lucas
AllDay listing
All eyes in the stock market are on today’s listing of billionaire Manuel Villar’s grocery chain AllDay Marts Inc., which will trade under the ticker “ALLDY” following an overwhelming reception, especially from retail investors.
“We are truly excited to bring the AllDay experience public. We have long believed in the Filipinos deserving a better supermarket experience, one that is at par with the best in the world, and this IPO (initial public offering) helps us do just that,” Villar said.
“When we priced the IPO [at 60 centavos each], we did so with a mind to help maximize long-term value for our new institutional and retail investors. The brisk market uptake of our shares validates this price and we are very pleased and grateful for the warm reception that the AllDay IPO was given. This confirms that many share our vision in how to disrupt the supermarket landscape, and that many believe in AllDay’s capability to bring an elevated supermarket experience to more and more Filipinos across the country.”
To recall, demand from the retail tranche hit 10 times the allotment, while the allotment to local small investors (LSI) reached 1.62 times the limit— the first time for the LSI quota to be breached. Due to the oversubscription, 1,781 investors will have to be refunded for the excess order. On the institutional tranche, the offer was 2.5 times oversubscribed.
Since this was the first time that this LSI overflow happened, how will the refunding be executed? It’s not based on a first-come, first-served basis. In most cases, those who ordered P201,000 and below (versus a maximum allotment of P300,000) got a full allotment, while those who ordered more than P201,000 got only partial allotment. As such, demand from small investors still got prioritized.
PNB Capital, along with BDO Capital and Investment Corp. and China Bank Capital Corp. acted as joint lead underwriters and joint bookrunners for this successful P4.53-billion stock market debut.
Upon listing, ALLDY will have a market capitalization of P13.71 billion versus some of its “pure play” supermarket peers like MerryMart and Puregold Price Club, which are valued by the market at P24.61 billion and P121.8 billion, respectively.
