Digiworld Corporation (HOSE: DGW) has just marked a new turning point for 2022 by signing a strategy with Whirlpool to officially encroach on home appliance distribution.

Whirlpool is North America's largest home appliance corporation, serving more than 200 million people and recording 2020 revenue of USD 19 billion. Therefore, the handshake with Whirlpool not only helps Digiworld expands its merchandise category but also increases its position. How did Digiworld catch the eye of Whirlpool and what are its plans for 2022? We spoke with Mr. Doan Hong Viet, CEO of Digiworld to learn more about this story.

Digiworld has become the exclusive distribution partner for Whirlpool. It seems that 2021 has been a very lucky and favorable year for Digiworld?

In business, there is always an element of good luck, but the important thing is intrinsic of the company. There must be organizational and operational readiness so that when the opportunity comes, the enterprise will seize the opportunity. When a good luck comes, enterprises will easily achieve outstanding growth.

In 2021, Digiworld is estimated to reach VND 21,000 billion in revenue, up about 70% over the same period. This is the result of the growth of all merchandise categories in business. In particular, laptops and tablets increased sharply due to the appearance of the Covid-19 pandemic, which boosted market demand. Xiaomi increased its market share to 17% in Vietnam and Apple gained market share from portable goods, also contributing to Digiworld's revenue growth.

The increase in market share of Xiaomi and Apple has helped Digiworld's revenue increase sharply.

In 2022, will Digiworld's business still have a mutation factor?

In 2022, Digiworld is expected to submit a revenue plan of about VND 28,000 billion, or an increase of 40% compared to 2021. This is a goal based on what we are doing, not on what is uncertain so there may be a spike. For example, new merchandise categories such as home appliances may grow stronger than planned.

Home Appliances is currently a new segment of Digiworld, but this is a large-scale industry, estimated at USD 1.4 billion. Digiworld will endeavor to gradually increase market share here.

The handshake with Whirlpool not only helps Digiworld expand its portfolio but also increases its position

Digiworld has been involved in distributing too many industries. So what are the focus areas of the Company in 2022?

In existing merchandise categories such as phones, the Company maintains contracts with partners such as Xiaomi and Apple and seeks to expand cooperation with other partners. For example, Digiworld will distribute mobile phones to Motorola in the niche of ultra-durable phones, less damage when impacted, less battery drain, suitable for workers and engineers at construction sites. Or in office equipment and consumer goods, Digiworld will continue to add new products and brands. For example, Digiworld is already involved in distributing Microsoft software. Although sales of new items are estimated to account for only a low proportion of Digiworld's total revenue, in consumer goods alone, the company also sets a target of trillion VND.

Product diversification strategy is a way for Digiworld to hedge against risks dependent on large customers. If you pay attention, you will see that the contribution proportion of large customers to Digiworld's revenue is decreasing even though the business is still growing.

Digiworld's 2022 strategy is to continue adding new products and airlines

Digiworld aims to capture a 10% market share in Home Appliances and aim for a billion-dollar company. Are those ambitious goals?

Digiworld's business model is to provide MES (Market Expansion Services) for brands, with 5 service chains: Market Research, Distribution, Marketing & Sales, E-Commerce and After-sales. Currently, the company is implementing MES for about 40% of the contracts that Digiworld has signed. From this model, we often say that Digiworld can sell everything from needles to ships and cars.

As for Home Appliances alone, Digiworld's goal of holding 10% market share is a process, not an immediate achievement in 2022. We estimate that, out of VND 28,000 billion in estimated revenue in 2022, new areas such as Home Appliances segment can contribute VND 3,000 billion. In 2022, besides distributing to Whirlpool, Digiworld will distribute goods to another brand from China. Home appliances will enrich Digiworld's portfolio.

In terms of billion-dollar target, we are not limited to USD 1 billion or USD 10 billion, nor do we place a heavy emphasis on billion-dollar revenue or billion-dollar capitalization. It may be billion-dollar revenue now, but 2-3 years later it's a billion-dollar capitalization company. We pay more attention to the stature of billions of dollars, stick to the 3C strategy (facilities – Co so, people – Con nguoi and opportunities – Co hoi) and continuously.

In addition to diversifying products and categories, what is Digiworld preparing to achieve its billion-dollar revenue target in 2022?

We invest in expansion, increasing warehousing and personnel. Digiworld's warehouse area in 2022 is estimated to increase 4 times compared to the previous year and human resources will also increase but not dramatically, mainly recruiting new sales and marketing positions.

Digiworld continues to pay attention to the 3C strategy, namely adding ERP features to the process, retaining profits for investment and implementing more ways of recruiting, training and retaining talents. I believe that when preparing the first 2Cs well, opportunities will always come.

Relying on internal strength alone does not seem to be enough. Does an enterprise still need external resources to make a breakthrough?

Digiworld hires consultants and uses external brainpower. For example, in the Board of Management at Digiworld, there are 2 people who are independent members, a good person in the consumer goods industry and a seasoned person in the field of Healthcare. They are involved in advising Digiworld.

What about M&A activities, sir?

Last year, Digiworld only launched 1-2 small deals. This year, Digiworld is open and still looking for target companies. These are companies whose products are suitable for Digiworld's ecosystem, are small-scale, have similar cultures so as not to encounter conflicts in the cooperation process... With the investment in Viet Money, the Company will continue to invest but keep the same proportion of capital contribution as last year.

What opportunities does Digiworld see in M&A?

Digiworld's expansion strategy is unlimited, so the Company sees opportunities everywhere. But with that said, it's important to be well prepared to seize opportunities and Digiworld invests with caution and efficiency in mind, so we often look at it carefully.

Currently, we are looking for partners in Digiworld's merchandise categories. In addition, we are interested in corporate culture, but more specifically the personality of the founder.

Digiworld's business model is to provide Market Expansion Services (MES) for brands.

What characteristics and cultures does Digiworld promote?

Digiworld values honesty and dares to take responsibility. In addition, if you do not love the challenge, Digiworld may still be standing still.

Loving a challenge is not to aim for a goal higher than possible but to dare to think, dare to do things outside the existing formula, be willing to venture into new things and accept challenges.

Digiworld has not limited itself to the original industry but has gradually expanded into new industries: laptops, phones, healthcare, consumer goods and home appliances. In the future, Digiworld may continue to expand into many other industries.

Reaching a billion-dollar business, the accompanying challenges will not be small. Are you worried?

If we love challenges, we will see that they are not so heavy.

Is the billion-dollar goal also Digiworld's long-term goal?

Digiworld's long-term goal is to grow at least 25% per year. Setting such a goal is very gentle. But if you know the rule of 72, you will see, with an increase of 24-25% / year, after 3 years it will double, 6 years fourfold, 9 years eightfold, 12 years sixteen fold and 15 years thirty-twofold times...

What a tremendous growth...

That is with the target of 25%/ year but in fact, since its establishment, Digiworld has grown an average of 36-37%/ year.

What do these overwhelming numbers say, sir?

That said, despite the grand vision that concretizes the steps out, there are no limits that cannot be overcome.

Perhaps there is still room for variables to come?

There will be variables, but if there is a year that is not achieved, there will be a year that exceeds the target, growing by 40-50%/ year, for example.

Where did you discover the magical link between compound growth and time to these impressive results?

The Rule of 72 states: Upon dividing number 72 by the percentage of compound growth per year, the number of years that the assets are doubled will be known. When Digiworld achieved an average growth of 36% per year, it only took 2 years to double its assets.

Does the problem lie in the ability of the business to persist in achieving its goals in the long term?

It's important to have an idea so that we can set the right goal and accomplish it. For example, Digiworld wants to achieve a 32-fold increase in wealth in 15 years. If you don't know the Rule of 72, it will be a very stressful goal. But because of knowing this formula, maintaining an average growth of 24% per year is no longer difficult to implement.

Seem like it was a lot easier?

That's right. But without thinking, it is impossible to lead action, there will be no desire, no concrete step to achieve the goal.

Many people have read the rule of 72, but if only looking at it as a math formula, it doesn't make much sense. Applying it to personal or business finance will be extremely valuable.

What do you think you need to fix to do better?

Everyone has disadvantages, but good organization is taking the strengths of one person to compensate for the weaknesses of the other. Each person has different personalities and disadvantages. The concept at Digiworld is to seek to promote the strengths of employees.

I still think that when a manager succeeds, he should look out the window, and when he fails, he should look in the mirror. Look in the mirror to take responsibility, and look out the window to see your success in the shadow of others.

Thank you!