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VIPSpar

MOZAMBIQUE - Industry

Hussein Chalha

CEO, VIPSPAR

Bio

Hussein Chalha is CEO of VIPSPAR.

“We are changing from a family business to a corporate business, so we are implementing a new system that will facilitate access to our customers from a technological aspect.”

From humble beginnings, VIP has been expanding rapidly within Mozambique and now looks to expand into Dubai, Tanzania, and Angola at it evolves from a family business to an international corporation.

Can you give us an overview of VIPSPAR’s journey and current position in Mozambique?

VIP started at the end of 2011. Our first store was in Tete, then we went to Chimoio, Pemba, Nacala, and Nampula. We started our business with Spar about six or seven years ago and we now have 17 stores in Mozambique. We have plans for 2024-2025 to open at least five more. In terms of our position in the market, we are one of the top three players in Mozambique. Mozambique is still a largely informal market, but the formal market is growing, which is why we are expanding all over the country. We have over 1,000 employees in our company, and we are now changing our culture from mere buying and selling into a service culture. We are going from being family business to being a corporate. It is a change of mindset for all the people who work with us.

What current challenges does the Mozambican retail sector face, and how is VIPSPAR addressing those challenges?

The big challenge we have in Mozambique is logistics. Getting products on time and making them affordable is always a challenge, but we can always work on that. The informal market is a challenge for us, too. We have shop expenses, we pay taxes, and so forth, but the informal market does not. The economy is also one of the biggest challenges. When the economy goes down, most people do not have the power to buy. We try to promote our products and keep our margins down during those times, but we are doing well.

Are you implementing any innovations to enhance the shopping experience and the operational efficiency of the company?

We are changing from a family business to a corporate business, so we are implementing a new system that will facilitate access to our customers from a technological aspect. We are going to push more onto promotions and marketing with the technology that we plan to implement. Though we are facing challenges, everything is evolving with technology, and we are going to follow. Even in power, we are thinking of using solar energy panels. We are also engaging a program of trying to reduce plastic bag use in our stores, so we are introducing paper bags. We are working on various parts of the service side with our employees to make them enjoy coming to work. These are the ways we are working to make a difference in VIPSPAR compared to our competitors.

Have you implemented any loyalty programs or customer engagement strategies to retain your customer base in the country?

We have recently created a new system that will allow the customers to have loyalty cards, gifts, and points. We do an annual ‘win a car’ promotion, and it is always rewarding to see people win a car just from buying a small amount. People can also win freezers. We are implementing loyalty cards, though it is difficult in Mozambique because of the internet connectivity challenges.

How do you foresee the future of the retail sector in the country?

We expect that the informal market will start disappearing, and the formal market will grow. I believe there will be more shops and more competitors soon. If the economy grows, it will be good for everyone, because it will encourage development. Everyone is waiting to see what is going to happen in 2024, especially with what is happening in Pemba. In 2025, we will open two shops in Maputo. We are already in Pemba, but we need to open a bigger shop.

Are you aiming to expand VIP out of Mozambique?

Yes, of course. We opened our first store in Dubai. It is a small store, and we are launching our second in 3Q2024. We are opening VIP Express in Dubai. We want to feel and see how things are going. The first store is doing well. We have plans to go to Tanzania, and, though the economy in Angola is not what it used to be, I believe we can still do something there. We have a good relationship with Spar, and the CEO supports us, but we are thinking of opening VIP more between Tanzania and Angola.

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