VietNamNet Bridge - Smartphone sales will continue to increase for at least the next five years in Vietnam, according to a survey conducted by the IDC firm. Though sales are slowing, Vietnam remains the fastest-growing smartphone market in South East Asia.
In August 2014, Wiko, a French smartphone brand officially joined the Vietnamese market with products priced under VND6 million.
Alcatel, which visited Vietnam a year before, has focused on mid-tier products.
Huawei, a Chinese brand, had an impressive product launch earlier this year.
However, the largest smartphone distribution networks such as The Gioi Di Dong, Vien Thong A and FPT Shop all reported that purchasing power was weak.
A senior executive of Lenovo Vietnam noted that it was very difficult for newcomers to sell products above VND6 million.
Vietnamese users would rather buy used Apple, Samsung or Sony products than brand-new products bearing unfamiliar brands.
Therefore, the opportunities for newcomers can only be seen in the low-cost market segment (less than VND6 million), where the competition is even stiffer than the high-end market.
While there are only several names in the high-end market segment, such as Apple, Samsung, Sony and HTC, there are numerous competitors in the low-cost market, including Oppo, Asus, Lenovo, Huawei, Mobistar, Q-Mobile, Wiko and Phillips.
High-end product manufacturers have also jumped into the low-cost market segment by launching products with reasonable selling prices and famous brands.
Samsung has launched A5 model at VND8 million, while Sony has marketed M4 Aqua at VND6.5 million.
The unsatisfactory sales have prompted manufacturers to expand their retail networks.
Lenovo, for example, has cooperated with Lazada Vietnam, an online distributor, to sell A7000.
Meanwhile, Alcatel and Lazada Vietnam will distribute Alcatel Flash Plus.
However, analysts believe that the expansion of the distribution channels cannot help much.
Market large enough for all
Mai Trieu Nguyen, director of Mai Nguyen distribution network, said that manufacturers who make professional investments could enter the Vietnamese market.
Asus and Oppo, for example, have been following very professional investment strategies since they arrived in Vietnam, especially in marketing. And they have reaped fruits.
Oppo’s models, for example, which sold slowly one year ago, have been selling better through Mai Nguyen’s.
Nguyen also noted that newcomers to the market should think about whether to focus on distributing products in large cities, which are full of smartphone brands, or in provinces and rural areas which have not been reached by others.
Mai Phu Phong, director of the PhonGee chain, said Vietnam was a potential market for those who know how to exploit it.