Vietnamese spend billions of dollars on smartphones

The latest report of GfK, a market analysis firm, showed that Vietnamese spent VND27.7 trillion to buy mobile phones in the first quarter of the year, an increase of 5.9 percent compared with the same period last year. 

However, the money was not spent on Vietnamese products and the market share held by Vietnamese brands has shrunk rapidly.

Vietnamese products now account for 3 percent of total 3.8 million smartphones launched on the market, a 50 percent fall compared with the same period last year, according to Q1 report of IDC Indochina.

There are many reasons behind the poor performance of Vietnamese brands. First, the mobile phone market has become saturated with growth slowing down. Meanwhile, the market is flooded with Chinese products which have strong features and competitive prices. Second, the marketing cost for new products is very high.

Moreover, Vietnamese manufacturers are not capable of inventing a new product line with outstanding features. Their production capacity is also limited, which has prompted them to outsource to China and label the products with Vietnamese brands.  

However, despite the failures, more Vietnamese investors still want to join the market.

Asanzo, the TV manufacturer which mostly sells products in rural areas, is one. The company has announced investment of $2 million to develop smartphone products. 

However, Asanzo’s owner Pham Van Tam stated Asanzo will not survive only on smartphones. The smartphone projects will mainly serve branding. Asanzo’s products will be be available at retail chains in large cities, but will flow into rural markets.

As such, Asanzo has positioned itself as a low-cost mobile phone manufacturer. However, analysts have warned that the manufacturer will have to compete fiercely with Chinese models which are flooding the domestic market.

Many Vietnamese brands have failed when investing in the low-cost market segment, such as Q-Mobile, HKPhone and Masstel.

Even FPT, the largest IT group and Viettel, one of three largest mobile network operators, has not succeeded with their F-Mobile and Viettel Phone.

However, one Vietnamese mobile phone brand still exists – MobiiStar. According to GfK, the company sold 22,499 products in March, holding 2.27 percent of market share.

Most recently, the Vietnamese brand in the market announced a plan to export its products to India. The move was described as ‘carrying coal to Newcastle’ as India is also flooded with low-cost products made in India and sourced from China.

However, new-generation investors don’t intend to target the low-cost market segment. BKAV, for example, sells its products at VND10 million, while Viettel plans to launch the high-end model Viettel Luxury Phone. 

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Kim Chi