Competition in the smart phone market is growing fiercer. In 2012, as revealed by market studying companies, Vietnam was estimated to consume about 1.4 million smart phones monthly. 92 percent of the products are from big firms such as Samsung, HTC, LG, Sony, Nokia, Apple, BlackBerry, Acatel and Philips, while the remaining 8 percent are from domestic brands.
Most domestic brands falling down
There was a period of time when domestic brands sprang up like mushrooms. Five years ago, there was estimated to be about 30 brands in the market, mainly involved in feature phones. However, three years later, upon the fading of feature phones, many domestic brands faded away. At present, there are only a small number of domestic brands surviving such as Mobiistar, Q-Mobile, FPT, and Viettel. They only account for about 20 products on the market with prices ranging from VND1.3 to 4.5 million.
Not desiring to create products which “lead” the users like what global brands are doing, domestic ones are managing to find ways of introducing products with similar features at lowest prices, as well as expanding to provincial and even district markets where products of famous brands haven’t reached.
Mr Nguyen Quang Minh, Director of Q-Mobile, said smart phones only account for 20 percent of product structure but up to 60 percent of turnover of this brand, being the “strategic products” of the firm. “Not mastering technology and being short of capital, domestic brands like Q-Mobile only target product quality and value to suit labourers with low income. Staying firm in this segment will help the enterprises survive”, said Mr Minh. Each month Q-Mobile imports 70,000 – 80,000 products for its business.
Mobiistar was the first among domestic brands to shift their business from feature phones to smart phones. According to Mr Ngo Nguyen Kha, Director of Mobiistar, each month this brand sells about 80,000 products to the market, in which smart phones are approximately 45,000 ones but makes up 80 percent of the turnover. Despite targeting the medium segment, “The current most serious pressure on Mobiistar is not capital and technology, but the growth rate of this product group in the market,” said Mr Kha. Domestic brands, to prove their capacity to join the game, will have to import in large volumes, and thus suffer large inventories. “Actually, inventory issues have led to bankruptcy of many brands. Profit should be traded off to prevent inventory overload. On the other hand, to make up reputation toward customers, producers should have a channels to share and understand consumers, shared Mr Kha.
New products continuously revealed
According to the statistic of GfK, by the end of January 2013, Samsung overcame Nokia to share 32 percent in Vietnam smart phone sector. Mr Nguyen Van Dao, Deputy Director of Samsung Vietnam, said that since 2012, Samsung’s manufacturing plant in Bac Ninh has seemed to only produce smart phones.
As a large brand in the smart phone market, HTC has continuously released new product lines that suit each customer category. For young consumers, HTC has lines such as HTC One 8x, while the Butterfly line is for those with high income and passion for technology. In late February 2013, Sony introduced the product regarded as the brand’s highest rank – Sony Xperia Z.
Realizing its slowness, in late 2012, Nokia revealed high rank phones in Lumia line such as Lumia 920/820 but still hasn’t gained back its top position in smart phone market. In 2012, LG paid more attention to smart phones, seen in the appearance of varied new products in the market in its Optimus line such as L9 and Optimus G. Besides, Lenovo and Huawei are also in the group that continuously adds new products on their shelves.
It is hard to penetrate the market, and it’s even more challenging to build up the brand and win the trust of consumers. Mr Nguyen Hong Chau, Chief Representative of HTC in Vietnam shared, “Customers are more and more demanding. They require not only new products, but also a price and product which suits the taste and income of different age brackets, to achieve high sales.”
Mr Nguyen Quoc Bao, Director of Thanh Cong Mobile, Distributor of Acatel and Philips, admitted that given the large number of big brands in the markets, penetration into the market requires, first, good quality, then cheap price and an accompanying commitment to service quality. “I don’t know how to say it, but it is really hard to join mobile phone market. Determination and fortitude must be quite high to be able to join the game.”
Vietnamese
