What's hot in the technology retail market in Vietnam in 2023?

2023 is a particularly difficult year due to the impact of the economic recession, in which the technology equipment retail industry is one of the most affected industries.

Thị trường bán lẻ công nghệ tại Việt Nam năm 2023 có gì hot?

The number of smartphones sold globally will continue to decline in 2023. (Source: Dan Tri)

According to a report from market research firm Counterpoint Research, the number of smartphones sold globally in the third quarter of 2023 decreased by 8% compared to the same period in 2022. In particular, sales of all 5 leading brands in the market decreased.

Global smartphone production has been declining for several consecutive quarters. In the first half of 2023, the global smartphone industry only reached 522 million devices, down 13.3% compared to the same period last year. According to TrendForce, this is the lowest level in the past 10 years.

Analysts at Counterpoint Research expect the market to continue to decline throughout 2023, especially in developed markets. However, the fourth quarter is expected to show positive signs. The analysts also predict that the global smartphone market will grow slightly in 2024.

A difficult year and fierce price war

Speaking to reporters, representatives of many large retail systems in Vietnam all shared the common opinion that 2023 will be a particularly difficult year due to the impact of the economic recession. In particular, the technology equipment retail industry is one of the most affected industries.

"For the entire mobile and electronics market in general, the current time is still at the bottom and there are no signs of recovery. The total market has decreased by about 33% in quantity compared to the time before the pandemic in 2020," said Mr. Huy Tan, communications representative of the CellphoneS system.

Since the beginning of 2023, the price war between dealers has been fierce. The volatile economic situation has directly affected business activities, forcing dealers to continuously launch incentive programs to attract customers. This has inadvertently pushed the price war to become more intense.

Accordingly, a series of retail systems such as The Gioi Di Dong, FPT Shop, CellphoneS or Di Dong Viet were all caught up in the price reduction race. There were times when the agents even "competed" with each other when adjusting the price reduction by 10,000 VND.

However, this is considered an unsustainable war and has negatively affected the business situation of all agents. Many systems said they have maintained operations for months with almost no profit.

"More than half a year of participating in the price war means more than half a year that the system has almost accepted to sacrifice profits in exchange for market share and improving customer experience. This means that from the end of May until now, the system's revenue has grown but the profits are almost insignificant," Ms. Phung Phuong, communications representative of the Mobile World system, shared.

Ms. Phuong added that the system had to restructure the scale of the entire store's operations, optimize the staff, and sacrifice profits.

Faced with this situation, the systems have all given up the price war. Instead, each unit has chosen different approaches to users to maintain business operations and expand the market.

"We always ensure flexibility and respond quickly to strong market fluctuations. Currently, we do not pursue a low-price strategy but focus on improving customer experience, diversifying goods, and improving service quality," said a media representative of the FPT Retail system.

Growth Expectations in 2024

Recently, a representative of Mobile World said that this unit is continuing to carry out a comprehensive restructuring process from the store block, purchasing block, warehouse to support departments.

"This process will certainly cause many changes. However, the company is forced to do so in order to escape the unfavorable market situation in 2023, aiming for 2024 to increase revenue, market share and strongly improve profits," said a representative of Mobile World.

Accordingly, Mobile World will focus on maintaining core activities, chains, stores, and product lines that create value for the company now or in the near future. In addition to reviewing and eliminating waste, the company will stop unnecessary activities and postpone investment in medium and long-term R&D projects during this period.

The Gioi Di Dong also reallocates all resources (leadership, stores, employees, finance, etc.) to ensure business focus and efficiency, and resolves resource surplus issues arising from restructuring in a reasonable manner.

The Bach Hoa Xanh, An Khang and AVAKids chains have completed their review of store closures in November. Thus, the number of stores at the end of November of these chains will remain stable from December.

With the The Gioi Di Dong, Dien May Xanh and Topzone chains, the company closed nearly 150 stores in October and November. It is expected that the system will continue to close some stores that are inefficient in terms of revenue and profit in December to stabilize operations, preparing for the peak sales season during the 2024 Lunar New Year.

"Faced with declining demand and purchasing power, Mobile World has actively embarked on a restructuring process to streamline its organization. The goal is to help the company adapt quickly and be more resilient to the volatile market," said a Mobile World representative.

Meanwhile, FPT Retail said it will deploy a mobile virtual network operator (MVNO) service to provide additional services to customers and leverage the ecosystem advantages of the entire FPT Group. The service is expected to officially launch in early 2024.

"In the long term, we still prioritize quality and user experience. This is what retains customers. In 2024, purchasing power in the phone and laptop segment is still weak due to macroeconomic factors that have not improved much. However, we still have the right to hope that the situation will be better in the new year," said a representative of FPT Retail.

Similarly, a representative of Mobile World said that in 2024, the system will continue to improve its online store system and optimize existing stores to enhance the shopping experience for customers.

"Stimulating the market is a difficult story. The new way to stimulate demand is to appeal to emotions, arouse shopping needs to promote purchasing power, helping to balance the market. This is not only our problem but also the problem of the entire technology equipment retail industry in 2024," Ms. Phuong commented.

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