Why Dfi Group Has Simplified Its Empire To Stay Competitive In Asia

DFI Group is turning itself into a leaner, data-driven operating company after years of portfolio complexity and uneven performance. The Hong Kong-based retail conglomerate, whose brands span supermarkets, pharmacies, convenience stores and Ikea franchises across Asia, reported a sharp rebound in 2025 earnings, with profit swinging to US$235 million, reversing a loss the year before.

“Effective execution of our strategy drove strong financial performance and higher shareholder returns in 2025,” said Lincoln Pan, chairman of DFI Group. 

A portfolio rethink

DFI’s most visible change in 2025 was its move away from a traditional investment-style retail portfolio.

The company completed a series of divestments, including its minority stakes in Chinese supermarket operator Yonghui and Philippine retailer Robinsons Retail, as well as the sale of its Singapore Food business. These moves generated roughly US$1 billion in proceeds, strengthening the balance sheet and allowing the company to end the year with a net cash position of US$70 million.

For decades, DFI, part of the Jardine Matheson conglomerate, operated as a sprawling portfolio of retail investments across Asia. A tighter operating structure is now replacing that model focused on businesses where it has direct control and stronger competitive advantages. Group CEO Scott Price described the shift as a move “from a portfolio business into a strategically focused operating company.”

Betting on health, convenience and value 

Within its remaining portfolio, DFI is doubling down on segments where it sees durable growth. Health and beauty retail has emerged as a particularly strong performer. Sales in the division rose 7 per cent to US$2.6 billion. In comparison, operating profit climbed 8 per cent to $228 million, driven by demand for wellness products and personalised services in stores operated under the Mannings and Guardian banners.

The company believes that health and wellness retail will remain a long-term growth driver as Asian consumers increasingly seek preventive healthcare products, supplements, and dermo-cosmetic treatments.

Sales of convenience retail, primarily through its 7-Eleven franchise operations, declined slightly due to falling cigarette volumes, but the company is repositioning the format around higher-margin categories such as ready-to-eat meals, which accounted for 24 per cent of convenience sales last year. 

Food retail remains a core business but faces increasing competitive pressure. Supermarket chain Wellcome has been forced to respond to cross-border shopping and price competition from Mainland Chinese e-commerce platforms, particularly in Hong Kong.

Digital ambitions

Beyond format-level improvements, DFI is building a digital ecosystem that connects its physical retail network with data-driven marketing and analytics.

Online sales penetration reached 6.4 per cent of revenue last year, with order volumes more than doubling. More importantly, the company is developing new digital revenue streams through its retail media network, DFIQ Media. The platform allows brands to advertise across DFI’s digital channels and more than 10,000 in-store screens across the region. Revenue from the unit quadrupled in 2025, albeit from a small base.

Expansion with a lighter footprint

While the company has become more selective about investments, it is still expanding its store network. In 2025, DFI opened 114 net new stores, largely through franchise partnerships. The approach allows the company to grow in high-potential markets while limiting capital expenditure and maintaining faster payback periods. In China’s Guangdong province, the group plans to expand its 7-Eleven network to around 2400 stores, while in Indonesia, Guardian’s health and beauty chain is targeting about 750 outlets by 2028.

Navigating a tougher retail landscape

According to the company, tourism flows are influencing performance in key markets. In Hong Kong, for example, higher tourist arrivals supported a recovery in health and beauty sales during the year. Meanwhile, big-ticket spending remains subdued, affecting segments such as Ikea home furnishings, where sales declined slightly due to weaker housing markets.

Looking ahead, DFI has set ambitious medium-term targets.

The company aims to increase its underlying profit to US$310 million to US$350 million by 2028, representing an annual growth rate of about 11 per cent. It also plans to raise online sales penetration to 7–10 per cent of revenue and improve return on capital employed to at least 15 per cent.

This year, the group expects underlying profit to range between US$270 million and US$300 million, with organic revenue growth of roughly 2–3 per cent.

Further reading: Why Ikea is abandoning the big-box playbook in China.

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