All these steps will be completed by the end of December.

Vingroup, explaining its decision on dissolving VinPro after five years of operation, said it wants to develop industry and technology, which are now the priority business fields of the group.

Analysts commented that Vingroup made a wise decision to give up the home appliance distribution division, because it was no longer profitable.

In 2018, the home appliance retail market witnessed the biggest merger deal in history when The Gioi Di Dong (Mobile World) took over Tran Anh.

Some years before, a series of M&A deals were made and many names disappeared from the market. Vingroup took over Vien Thong A, and Central Group from Thailand took over Nguyen Kim, while Topcare, Viet Long, WonderBuy, Best Carings and HomeOne, one after another, shut down.

When deciding to sell the 16-year-old Tran Anh chain, Tran Xuan Kien, who was manager of Tran Anh, admitted that he could not see the future of the market. He has visited some countries in the region and found that the home appliance markets were becoming saturated.

In its report released in 2018, KIS Securities also was negative about the home appliance market in the future, citing three reasons.

Some years before, a series of M&A deals were made and many names disappeared from the market. Vingroup took over Vien Thong A, and Central Group from Thailand took over Nguyen Kim, while Topcare, Viet Long, WonderBuy, Best Carings and HomeOne, one after another, shut down.

First, the penetration rate of electronics products is about to reach the maximum level.

Listed among the economies with the fastest digitalization in the world, the number of Vietnamese accessing smartphones in large urban areas doubled within five years, according to Nielsen.

In large cities like HCM City, Hanoi, Da Nang, Can Tho and Hai Phong, the number of smartphone users accounts for 84 percent of population, while in second-class urban areas, the figure is 71 percent.

According to Euromonitor, 70 percent of Vietnamese families have refrigerators, washing machines, personal computers, and electric cookers, and 30 percent of families own air conditioners, microwaves and vacuum cleaners.

Second, home appliance retailers have to compete fiercely with e-commerce.

In the past, marketplaces like Lazada, Shoppee and Tiki mostly sold low-value consumer goods. But now, home appliances from these channels have become more popular.

And third, retail premises rent in large urban areas has been increasing. According to CBRE Vietnam, the average retail premises rent in Hanoi and HCM City is $60-150 per square meter and the rent has increased by 10 percent a year. 

Tran Thuy

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