Many home appliance shops have had to sell food, medicine, watches, and glasses and join forces with partners to sell more products, because the profit from their core businesses has been insufficient.
Ten years ago were the golden days of home appliance centers in large cities. All of them were crowded. Retailers did not have to run many sale promotion programs to lure customers, except for several programs on holidays or Tet.
It’s different now. They launch sale promotion campaigns every week, but still cannot attract enough customers.
Nguoi Lao Dong’s reporters visited home appliance centers in HCMC and found that they were poorly patronized. At some centers, the number of workers was even higher than the number of visitors.
The Gioi Di Dong, the largest distribution center, is pursuing a new policy under which shops will have to shut down after 1-2 months of operation if sales are lower than requested.
|Ten years ago were the golden days of home appliance centers in large cities. All of them were crowded. Retailers did not have to run many sale promotion programs to lure customers, except for several programs on holidays or Tet.|
Nguyen Thanh Ha, the manager of a home appliance center in HCMC, admitted the golden age of the home appliance retail sector was over and that the situation has become serious in the last two years. However, retailers maintain their operations to protect their brands, while waiting for new investors.
Many retailers have to sell other products together with home appliances to earn extra money, or invest in new business fields.
Thien Hoa, for instance, is planning to invest in the education and real estate sectors. FPT Retail has begun providing a new service, allowing customers to order goods in the US and Japan. Prior to that, FPT Retail cooperated with Nguyen Kim to sell products on its website dienmay.fptshop.com.vn for mutual benefit.
Meanwhile, The Gioi Di Dong, established as a mobile phone distribution chain, opened Bach Hoa Xanh chain to sell food and kitchenware after realizing that the mobile phone and home appliance market was getting saturated.
According to Doan Van Hieu Em, CEO of The Gioi Di Dong, watches and glasses are being sold at 43 shops of the chain. They will be available at 100 shops by the end of September and 200 shops by the end of the year.
Analysts commented that physical home appliance centers now have to compete with online rivals Lazada, Tiki, Shopee and Adayroi whu hhave obtained considerable home appliance market share.
Nearly all well known home appliance distributors such as Samsung, LG, Apple, Sony and Panasonic display their products on online trading floors. Small retailers also open shops online to be able to access more customers and cut expenses on retail premises.
Contrary to all predictions, Vietnamese retailers are competing on an even footing with foreign counterparts in the domestic market.
The retailer community last week was stirred up by the news that a Vietnamese enterprise had acquired a famous foreign retail brand just after one month of negotiations.