After trial runs on smaller shopping carts in the second quarter, Nam Long Group (HOSE: NLG)‘s new strategy "Together make housing affordable again” has brought positive results as sales increased strongly again in the third quarter, particularly in October and November.

The domestic real estate market in Vietnam is facing various difficulties and challenges. These challenges include a mismatch between supply and demand, as well as low market liquidity. A representative from CBRE mentioned that the new supply of apartments in Ho Chi Minh City during the first 9 months of this year was only slightly over 7,700 units, which is the lowest in recent years. Similarly, in Hanoi, the new supply of apartments reached just over 6,900 units.

There is a narrowing gap between the affordable and mid-range apartment segment in these major cities. Specifically, in Ho Chi Minh City, the proportion of mid-range and affordable apartments accounted for only 16% during the first 9 months of the year, while in Hanoi, it accounted for 31%.

In addition to the supply-demand mismatch and narrowing apartment segment, another significant difficulty in the real estate market is the lack of customer trust. 

According to Mr. Tran Xuan Ngoc, the General Director of NLG, there is a lack of trust among customers towards many investors and the overall real estate market. Even individuals with financial resources are hesitant to make purchases.

However, there is still hope for market recovery due to the significant demand for housing. Additionally, the implementation of government policies aimed at dismantling barriers is also contributing to market support.

“Together make housing affordable again” strategy

Facing the market conditions, Nam Long has launched the strategy "Together make housing affordable again" to realize business activities.

Mr. Tran Xuan Ngoc stated that Nam Long's primary approach is to offer affordable housing products to customers. In this context, affordable products refer to the provision of products in each segment that customers can purchase if needed.

The second objective focuses on enhancing customer approach and improving the quality of customer service. It goes beyond offering products at discounted prices and aims to cater to customers with genuine housing needs.

As for the third point, Nam Long is willing to forego small benefits in order to navigate this challenging period alongside its customers.

Furthermore, Nam Long proposes a customer-centric strategy that involves developing policies centered around customers. The Group assumes a coordinating role and collaborates with various stakeholders, including banks, contractors, and suppliers.

Nam Long's policy framework is based on five key elements. The first element pertains to pricing optimization without compromising product quality, ensuring customer acceptance. For instance, Nam Long engages in negotiations with suppliers and contractors to reduce input costs and lower selling prices.

In terms of payment schedules, the duration for Nam Long's products has been extended from 12-16 months to 24-36 months.

Nam Long has implemented an approach to reduce interest rates by 3-5% depending on the product and project, as part of their interest rate support policy. Mr. Ngoc emphasized that they do not want to encourage 0% interest rate support to avoid promoting speculative demand.

During challenging times, Nam Long has been proactive in assisting customers who faced financial difficulties with their products. The company has provided support in reselling or negotiating with banks on behalf of these customers.

Improving customer service is one of the key priorities for Nam Long.

Sales increased sharply

There has been a significant increase in sales, thanks to the implementation of new strategies by Nam Long. If sales only reached VND 867 billion by the end of the second quarter, it is projected to reach VND 1,769 billion by the end of the third quarter. In October and November alone, sales experienced a substantial surge, reaching over VND 3,038 billion by the end of November.

Specifically, sales from the Akari City project amounted to VND 1,277 billion , the Mizuki Park project reached VND 457 billion, and the Waterpoint project achieved VND 1,304 billion in sales.

The General Director of Nam Long expressed that while sales are currently below expectations, the trend suggests that the last month of the year will see a significant increase of VND 1,000-1,500 billion in revenue.

Regarding the approved revenue and profit plan for 2023, Mr. Ngoc mentioned that Nam Long is confident in achieving over 80% of the profit target.The transfer of 25% of the Paragon project will be delayed until 2024 due to legal procedures.

Source: Vietstock