According to Counterpoint Research, the smartphone market has been impacted by the recent economic difficulties. The report indicates that amidst challenging business conditions, retailers have had to revise their expansion plans and reassess their business strategies.

Retail stores have reduced operating hours and lowered salaries due to the reduction in customers since the Lunar New Year.

Initially, original equipment manufacturers misjudged the demand, resulting in high inventory levels. Subsequently, realising the actual situation, they rushed to offer discounts to clear the excess stock. All phone manufacturers, except for Apple, experienced a decline in sales in Q1.

Glen Cardoza, a senior analyst at Counterpoint Research stated, "The recovery of smartphone demand in Vietnam is expected to be slow in the second quarter of 2023 and will require time while the economy continues to face numerous challenges. As one of the top global exporters of smartphones, Vietnam also depends on the stabilisation of the global economy. When conditions begin to improve in late 2023, the market may benefit from pent-up demand, particularly in the low-price segment."

In Q1, the average price of the iPhone 14 Pro Max was reduced by 12 per cent, resulting in a 12 per cent increase in iPhone sales compared to the same period last year.

Apple climbed to the third position in the first three months of 2023. Initially, there was considerable demand for the iPhone 14 Pro in Vietnam, but it gradually cooled down. Apple subsequently lowered the price of iPhones to stimulate the market and reduce inventory.

Sitting among the markets that are most significantly impacted by low consumer demand and excessive inventory in the Southeast Asian region, Vietnam may experience a more protracted recovery process. The Vietnamese smartphone market is projected to exhibit a stagnant performance throughout the year, as evaluated by Cardoza.

The retail chains swiftly initiated substantial price reductions for iPhones towards the end of the first quarter, intensifying price competition as they entered the second quarter.

Counterpoint Research also revealed that Samsung was the leading brand in the Q1, capturing a 30 per cent market share. However, the South Korean giant experienced a 32 per cent on-year decline in sales. It secured the top position due to its varied product portfolio and competitive pricing.

The Galaxy A04 emerged as the top-selling phone in the sub-$200 price segment and gained significant popularity in the Vietnamese market. In the $200-$400 price segment, Samsung dominated seven out of the top ten positions, led by the Galaxy A14 5G.

These two price segments were the most preferred in Vietnam during the first quarter of 2023, accounting for 71 per cent of total sales. The dominance of the low-price segment and the preference for global brands over those from China have helped Samsung solidify its position.

Chinese brands Xiaomi and Vivo faced numerous challenges in Q1, with corresponding sales declines of 46 per cent and 52 per cent.

The market share of online sales also decreased to 15 per cent in the first quarter of 2023, down from 17 per cent in the fourth quarter of 2022. This decline can be attributed to reduced online promotional activities.

With offline retail chains offering discounts and conducting promotional campaigns for premium devices, e-commerce platforms have struggled to attract customers, according to Counterpoint Research.

Source: VIR