Automobile, electrical and electronic goods market: Purchasing power is shrinking

SGGP 05/27/2023 08:47

At present, the electronics market is quite gloomy. In many stores and supermarkets, there are more sellers than buyers even though discount and promotion programs are continuously launched.

Customers look at products at a Dien May Xanh store in Ho Chi Minh City.

few customers

On weekends, Cho Lon electronics supermarket (Cach Mang Thang Tam, District 3) has a few customers looking at the products. Also, supermarkets in this system on Truong Chinh Street (Tan Binh District), Quang Trung (Go Vap District) have a small number of customers coming to visit and shop. "Previously, each employee's income was over 15 million VND/month, now the fixed salary is only less than 8 million VND/month", said Ms. M., a product introduction employee for a famous electronics brand at Cho Lon electronics supermarket.

At around 7pm on a weekend, at the booth of Nguyen Kim electronics supermarket (located in BigC Truong Chinh, Tan Phu district), there were only 3 adults and 1 child watching the TV products on display. Continuing to record at this supermarket system on Quang Trung street (Go Vap district), the entire shopping space of thousands of square meters had only a few customers. After looking at the product samples and checking the price of a 1 HP air conditioner, Mr. Ngo Van Phu (residing in Go Vap district) said that his house is small, located in a deep alley and quite hot, so he wanted to buy an air conditioner for convenience. The price ranges from 5.5-11.5 million VND/unit, a decrease of 5%-26% compared to before, depending on the brand. "However, I still have to consult other electronics supermarkets before finalizing the purchase," said Mr. Phu.

According to supermarkets, there are many cases of people looking at products but not buying right away like Mr. Phu. According to supermarkets, there are many good promotions and discounts ranging from 5%-40%, support for installation, shipping costs, gift vouchers, etc.; however, purchasing power has still decreased sharply from 30%-70% compared to before the Covid-19 pandemic. According to information from Nguyen Kim electronics system, Cho Lon electronics supermarket, Dien May Xanh, etc., consumers are more interested in essential goods, so high-value, non-essential items (such as electronics) are out of the priority "basket" of buyers, causing inventory to increase.

Statistics from the General Department of Customs show that since the beginning of May, the number of imported cars has continued to decrease rapidly, with the country importing only 3,257 cars of all kinds, with a total turnover of more than 88 million USD. Meanwhile, in the first quarter of 2023, the country imported more than 42,000 cars, with a total turnover of over 925 million USD. According to the Vietnam Automobile Manufacturers Association (VAMA), in April, the sales of the entire car market reached only 22,409 vehicles, down 25% compared to March 2023 and down 47% compared to March 2022. In the first 4 months of 2023, the total sales of the entire market decreased by 30% compared to 2022, with specialized vehicles alone decreasing by 58%. According to the Ministry of Industry and Trade, businesses are facing a situation of high inventory and a sharp decrease in vehicle sales. The causes leading to this situation are related to the ability to access bank loans, high interest rates, exchange rates, inflation, etc.

"Strengthen" the wait

A series of measures have been applied by businesses such as cutting staff, shrinking premises, offering big promotions to “clear” inventory, selling more household items such as cups, bowls, etc. but still ineffective. To solve the immediate difficulty, recently, Thien Hoa electronics supermarket, at the foot of Tham Luong bridge (bordering Tan Binh district with district 12) has closed and announced the transfer of premises.

Similarly, Nguyen Kim electronics supermarket (next to BigC Truong Chinh) used to be bustling due to the large number of customers, but now it has reduced its space, moved the store to the ground floor and operates right in BigC supermarket. Many electronics stores and supermarkets that used to be bustling along Hoang Van Thu and Ly Thuong Kiet streets (Tan Binh district) have now also quietly closed or returned their space due to lack of customers.

Why do people visit stores and supermarkets less than before? According to the explanation of some electronics businesses, the general mentality of families before the Covid-19 epidemic was to be ready to change to new products (TVs, refrigerators, washing machines, etc.) after a period of use rather than wait for them to break, but now income is affected, so it directly affects purchasing power. In addition, the increasing habit of online shopping is one of the reasons why customers do not go directly to supermarkets.

Businesses say it may take a few years for the market to become bustling again, but all of that is just a forecast. Faced with immediate difficulties related to premises costs, employee salaries, warehouses for storing goods, etc., businesses still have to calculate and "strive" every day. It is known that this is a difficulty not specific to any industry in the current context, but if retail businesses cannot survive and the State does not have timely support policies (such as tax reduction, preferential loan interest rate support, etc.), it will affect the entire economy.

Foreign goods dominate

Currently, some domestic branded electrical appliances such as Kangaroo, Alaska, Sunhouse, Nagakawa… have a rather small market share, insignificant compared to a series of foreign “giants” present in Vietnam. It is estimated from businesses that the market size of brands such as Samsung, LG, Sony, Casper, TCL, Toshiba, Sharp, Panasonic, Electrolux… in our country is about 2.5 billion USD.

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