2020 – unprecedented year for mobile phone retail chains

With the sharpest revenue decrease in history, mobile phone retail chains in Vietnam experienced a memorable year in 2020.

2020 – unprecedented year for mobile phone retail chains

The Gioi Di Dong Group reported a 7 percent revenue increase in the first 11 months of 2020

The Gioi Di Dong Group (Mobile World) reported a 7 percent revenue increase in the first 11 months of 2020 in comparison with the period in the year before. However, if considering mobile phone and home appliance sales alone, the retailer witnessed the sharpest ever decline in growth rate.

The sales of mobile phones decreased by 12 percent, while Dien May Xanh (Green Home Appliance), which distributes home appliances, saw a modest growth rate of 0.3 percent. These are the sharpest declines since its listing in 2014.

FPT Shop was in a similar situation. The revenue of FPT Retail, the holding company of FPT Shop, in the first nine months of 2020 declined by 14 percent compared with the same period of the year before, while the gross profit decreased by 5 percent.

Explaining the minus growth, FPT Retail said the Covid-19 crisis had an adverse impact on the company’s business performance. The situation worsened as people tightened their pursestrings and cut spending on electronics and valuable products.

Meanwhile, the retail chain is making heavy investment to develop the Long Chau drug store chain, which led to investment cost increases.

2020 was an unprecedented year in the history of the mobile phone retail sector. In the peak months of the pandemic, March and April, about 30 percent of stores of The Gioi Di Dong, FPT Shop and other chains had to close temporarily during a lockdown.

At that moment, the chains had to limit the number of people entering stores. Buyers were given chairs and asked to sit two meters from each other.

The Gioi Di Dong even showed phone numbers of shop managers, so that buyers could call the managers. After calling managers, officers would bring products out of the shops to show to customers outside.

Since retailers did not have experience, they applied social distancing in different ways. Some shops only received loyal clients, while others applied a ‘half-open’ policy.

With the sharpest revenue decrease in history, mobile phone retail chains in Vietnam experienced a memorable year in 2020.

At the moment when the share prices plunged because of Covid-19, Nguyen Duc Tai, co-founder and president of The Gioi Di Dong, predicted that the outbreak in the country would be contained by June (2020) and the purchasing power would recover. With a vaccine, it would be controlled, but, if not, businesses would suffer in the future.

Most of Tai’s predictions were correct. The pandemic has been controlled well in Vietnam and the market has recovered. Thanks to investments in Bach Hoa Xanh five years ago, The Gioi Di Dong still gained growth in revenue and profit.

2020 a successful year for Apple’s officially distributed products

 

Covid-19, plus new policies, helped the market for iPhone products that are distributed via authorized resellers. But iPhone products imported through unofficial channels was worse than in previous years.

Because of Covid-19 and lockdown, very few products could be carried to Vietnam across border gates by travelers last October, when the iPhone 12 was officially launched on the market.

In addition, phone traders now hesitate to import and sell iPhone products with unclear origin because of Decree 98, which imposes heavy fines on making and trading counterfeit and prohibited products, and on individuals trading smuggled goods.

Apple introduced four iPhone 12 models in 2020. Of these, iPhone 12 and iPhone 12 Pro were marketed on October 23, and iPhone 12 Mini and iPhone 12 Pro Max in early November.

In the years before, private shop owners earned big money because they had next-generation iPhones for sale sooner than iPhone authorized resellers. But in 2020, officially distributed iPhone 12s became available in Vietnam soon, on November 27, or just two weeks after they were launched in other markets.

Meanwhile, unlike previous years, the prices of officially distributed iPhones were not much higher than the prices of unofficially distributed products. All these factors prompted consumers to turn their back to products with unclear origin.

At that moment, some private shop owners told VietNamNet that they had stopped retailing products carried across border gates. Later, some of them shifted to sell products that Apple officially distributes in Vietnam.

Apple recently said it will sell Macbook running M1 chip in Vietnam very soon with competitive prices. Analysts say that the manufacturer took the move to eliminate unofficially distributed products in Vietnam.

Stiff competition

2020 also witnessed stiff competition in the distribution of mobile devices. The last stores of Vien Thong A shut down in January 2020.

Vien Thong A was considered the ‘oldest brother’ in the mobile phone distribution sector, which once dominated the domestic market, especially in HCM City.

Analysts said mobile phone retailers will have to adapt to the ‘new normal’ in 2021, or they will be excluded from the market. 

Hai Dang

Mobile phone retailers shift to other services as market saturated

Mobile phone retailers shift to other services as market saturated

The mobile phone retail business is believed to be saturated and will continue to face difficulties in growth.

‘Make in Vietnam’ Vsmart Aris 5G mobile phone in international press

‘Make in Vietnam’ Vsmart Aris 5G mobile phone in international press

News about the launch of Vsmart Aris 5G smartphone made in Vietnam by VinSmart has appeared in Forbes, The New York Times, Reuters and The Star.

 
 

Other News

.
Teachers disciplined after incidents at school
Teachers disciplined after incidents at school
FEATUREicon  16/03/2021 

A teacher in Thanh Hoa was disciplined for drinking beer with students, and a teacher in Binh Thuan fell down the stairs after she was criticized for beating a student. These incidents were among others that caught the public's attention last week.

Businesses lose customers, run out of money, lay off workers
Businesses lose customers, run out of money, lay off workers
FEATUREicon  16/03/2021 

Poor sales, supply chain disruptions, revenue decreases and personnel cuts have all occurred to enterprises amid the Covid-19 pandemic.

Two sets of textbooks will not be available for 2nd graders
Two sets of textbooks will not be available for 2nd graders
FEATUREicon  15/03/2021 

The Ministry of Education and Training has announced that there will be only three sets of textbooks for second graders, including two published by the Vietnam Education Publishing House.

Mobile Money: one decision benefits millions of people
Mobile Money: one decision benefits millions of people
FEATUREicon  15/03/2021 

With Mobile Money, people in mountainous areas or islands can remit money and make payments for goods and services through SMS on their mobile phones.

The birth of quirky firefighting equipment
The birth of quirky firefighting equipment
FEATUREicon  15/03/2021 

A lofty idea to help constrain fires begets a wondrous outcome.

Cua chicken: from a royal dish of yore to a notable cuisine
Cua chicken: from a royal dish of yore to a notable cuisine
FEATUREicon  15/03/2021 

The chicken from Cua land is known for its prime taste and was once served as a royal food hundreds of years ago.

Government officials convicted of public land violations, why?
Government officials convicted of public land violations, why?
FEATUREicon  15/03/2021 

Land scandals like Thu Thiem (HCM City) have revealed distorted land values caused by decisions of officials on authority, Mr. Dang Hung Vo told VietNamNet.

E-government: removing bottlenecks with a new approach
E-government: removing bottlenecks with a new approach
FEATUREicon  13/03/2021 

After two years implementing Resolution No. 17/NQ-CP on e-government, Vietnam has made great progress, adopting a new approach to solving bottlenecks and problems that have existed for a long time.

Businesses borrow VND400 trillion at high interest rates, raising concerns about solvency
Businesses borrow VND400 trillion at high interest rates, raising concerns about solvency
FEATUREicon  13/03/2021 

The financial health of many enterprises that issued bonds in 2020 is getting worse, with profits not high enough to pay bond interest.

Mobile Money paves the way for sandbox mechanism: minister
Mobile Money paves the way for sandbox mechanism: minister
FEATUREicon  13/03/2021 

Mobile Money on a trial basis will create a precedent for applying the sandbox mechanism to other services and new professions to appear in digital society.

Vietnam to form digital government by 2025
Vietnam to form digital government by 2025
FEATUREicon  12/03/2021 

Digital government will be formed by 2025, representing a transition from e-government. The challenge will be management of change.

Despite Covid-19, businesses still make multi-trillion dong investments
Despite Covid-19, businesses still make multi-trillion dong investments
FEATUREicon  12/03/2021 

Instead of staying idle and waiting for the pandemic to be contained, many businesses in Vietnam are making investments, training workers and laying down the foundation to make a breakthrough when the Covid-19 pandemic is over.

Online education: golden land for venture investors
Online education: golden land for venture investors
FEATUREicon  11/03/2021 

Like many other countries in the region, Vietnam is seen as an attractive market for online education startups.

The East Sea is 'magnet' attracting many countries
The East Sea is 'magnet' attracting many countries
MARITIME SOVEREIGNTYicon  11/03/2021 

In early March this year, the East Sea saw the presence of warships from many countries.

Innovation must be associated with the public sector
Innovation must be associated with the public sector
FEATUREicon  11/03/2021 

We must promote innovation in the public sector, and a state management system that is flexible and adaptable in order to utilize all resources in society.

Traffickers in tigers pays heavy price for illegal activities
Traffickers in tigers pays heavy price for illegal activities
FEATUREicon  11/03/2021 

Despite ironclad moves taken by appropriate agencies, the trafficking and illegal transport of tigers to make tiger bone glue remains a burning issue in Vietnam.

Will the requirement on certificates for professional titles of teachers be removed?
Will the requirement on certificates for professional titles of teachers be removed?
FEATUREicon  11/03/2021 

A representative of the Ministry of Home Affairs (MHA) says the Ministry of Education and Training (MOET) needs to show its official view about whether to remove the requirement on a certificate for professional title and why.

Refusing to sell businesses to foreign giants, businesses vow to develop VN brands
Refusing to sell businesses to foreign giants, businesses vow to develop VN brands
FEATUREicon  11/03/2021 

Local sources several years ago reported that a large foreign corporation had completed negotiations to buy Sunhouse, a Vietnamese kitchenware brand, at the price of $250 million.

Solar power developers' capacity still not fully used up
Solar power developers' capacity still not fully used up
FEATUREicon  12/03/2021 

The Feed-in-Tariff (FIT) of over VND2,000 per kwh, or 9.35 cent, has encouraged many investors to pour money into solar power. However, they have fallen into a dilemma because of unforeseeable problems.

Public land management and the Land Law
Public land management and the Land Law
FEATUREicon  10/03/2021 

In 2020, a number of public land scandals were brought to court and numerous government officials were found guilty.

 
 
 
Leave your comment on an article

OR QUICK LOGIN