Analysts began issuing warnings about the saturation of the mobile phone market several years ago. However, mobile phone distributors are still thriving.
GfK reported that within 12 months, by September 2019, 20.3 million feature and smart phones had been sold in Vietnam, a decrease of 1.7 million compared with the same period of the previous year.
The number of feature phones sold dropped from 9.9 million to 8.2 million, while smartphones went from 12.3 million to 12.1 million.
In a market where all people own a mobile phones, the minus growth rate is anticipated.
However, no mobile phone distributor has had to stop their business and no phone manufacturers have gone bankrupt because of market saturation. Though growth is no longer high, manufacturers and distributors still have every reason to be optimistic about the market.
The market is predicted to have value reaching $4 billion, or VND100 trillion, and mobile phone sales still can bring a high proportion of revenue to technology product retailers.
|GfK reported that within 12 months, by September 2019, 20.3 million feature and smart phones had been sold in Vietnam, a decrease of 1.7 million compared with the same period of the previous year.|
Mobile phone manufacturers launch new products every year with new features, so the demand for new products always exists.
Nguoi Lao Dong cited a report fro GfK as showing that 1.2 million products were sold a month in 2019, or 40,000 products a day. The smartphones priced at below VND3 million accounted for 20.4 percent of market share with 2.99 million products sold, or 8,200 products sold a day.
The decision by the government to deploy 5G technology soon in Vietnam is another reason for analysts to have confidence in the prosperity of the market. People will have to spend money on 5G devices to enjoy the latest technology.
The Ministry of Information and Communications (MIC) plans to cut 2G by 2022. If the plan occurs, feature phone users will have to buy smartphones or feature phones with 3G support, creating a new market.
Of over 20 million mobile phones sold in 2019, about 60 percent were smartphones, while the remaining were feature phones. Manufacturers and retailers hope that the 40 percent of buyers who bought feature phones will buy smartphones in the future.
Large smartphone manufacturers such as Apple, Samsung and Huawei have seen a decrease in demand for mobile phones and they have raised the selling prices of high-end smartphoneswhich target high-income earners.
However, it is clear that mobile phone distribution is no longer the ‘goose that lays golden eggs’. That is why The Gioi Di Dong, FPT Shop and other distributors have been seeking new driving forces for growth.
The mobile phone market is getting saturated and phone distributors must seek a new driving force for growth from other sectors.
Opening laptop centers is one of the plans implemented by mobile phone retailers to restructure their business as their core field no longer brings satisfactory profit.