Though subject to a Ministry of Industry and Trade’s restriction on luxury imports aimed at curbing trade deficit, mobile phones, mostly cheap and fake products from China, have made inroads into the local market in different ways.

In its circular No. 197 taking effect since June 1, the Ministry of Industry and Trade stipulated that luxury goods including mobile phones, cosmetics, wine and liquor, can only be imported through international ports in Hai Phong, Da Nang and Ho Chi Minh cities.

Yet, the circular had a loophole which many local importers had learned to take full advantage of, some insiders said.

Since the circular No. 195 banned only full-set mobile phone imports via airlines but not the phones’ parts, importers disassembled their full-set products into parts and imported them via airlines.

Moreover, the low import tariff of only 2 percent slapped on both the full-set mobile phones and their parts have encouraged the growth of imported cell phones, according to some officials from Ho Chi Minh City’s customs agency.

Another common trick with the importers is to import the goods under the non-trade categories such as gifts without trading invoices.

With this, mobile phones can be imported via air, sea and land without facing the restriction of the circular no. 197.

Chinese fake mobile phones glutting local market

With the importers fully exploiting the regulatory loophole, imported mobile phones, especially those with Chinese origins, keep arriving in Vietnam in massive numbers.

According to the General Customs Department, import turnover of Chinese mobile phones last month surged to US$216.1 million from a mere $77.62 million recorded three months earlier.

At the end of the third quarter of this year, import turnover topped $1.1 billion, up by 51.96 percent year on year and Chinese mobile phones accounted for 73 percent of local market share, the customs agency said.

Since the targeted consumers of the cheap Chinese mobile phones are low-income earners, workers and students, products carrying the brands of Qmobile, Mobell, Pop Mobile, K-Touch, and Gfive are dominating mobile phone stores around the industrial parks and schools in Thu Duc, Go Vap and District 7 in Ho Chi Minh City.

Tran Van Thang, who runs a mobile phone store in Go Vap District, said Chinese mobile phones were sold at much lower prices than other brands.

“A China-made POP Mobile P71 phone imitating Nokia E71 is sold at only VND1 million, while the real Nokia E71 costs VND6.5 million,” he said.

Mobile phone traders said a large number of cheap Chinese cell phones knocking off well-known brands have been illegally brought into Vietnam recently.

Fake iPhones, and high-class Nokias could easily be found on sale in stores around the city with prices ranging between VND1.3 million and VND3 million, they said.

Source: Tuoitre