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Slowed momentum
The domestic IT and electronic market is still expected to grow amid macroeconomic concerns and shifting consumer habits.
Market researcher GfK Vietnam predicts the local information technology (IT) and electronics market will reach US$4.07 billion in turnover this year, a 27 percent growth compared to last year.
IT product distributor The Gioi So’s (Digital World) Chairman and President Doan Hong Viet said though the size of the Vietnamese IT market is only that of the Philippines and much smaller than other IT markets in Southeast Asia, its growth is the highest.
“Our foreign partners think very highly of the Vietnam market’s potential,” Viet said.
Digital World’s revenues in the first four months of this year jumped by 82 percent compared to the same period last year.
Of the IT and electronics market, GfK estimates IT products will grow this year by 41 percent, home electronics by 34 percent, and telecommunications by 18 percent.
Mobile phones, which accounted for 23 percent of the IT and electronics market last year, are predicted to lead the market for the next several years.
GfK projects this sector’s growth to be 30 percent and sales to reach eight million units.
Although estimated growth figures for this year are lower than last year – the IT and electronics market in 2007 grew by 33 percent – consumer experts say they are good numbers considering the country’s overall economic performance.
Some businesses, however, are not without concern for the future.
Samsung Vina’s Vice President Nguyen Van Dao said sales had started to decline in May.
“Consumers’ concern and saving habits have started to impact the sales of IT and home electronics products,” he said.
Dao said the products that will be affected the most are large-sized LCDs and refrigerators.
The dollar’s increasing value against the dong has also made these exported products more expensive for local consumers.
The Gioi Di Dong’s (Mobile World) President Nguyen Duc Tai said his company now opens just one new outlet every month, rather than two to three as earlier planned.
“In the past, office employees bought new cell phones every 18 months on average.” Tai said.
“This period is over 20 months nowadays. We have to scale down our plans.”
Tai said cell phone shoppers are also paying careful attention to prices.
At Mobile World, the revenue from cell phones priced over VND3 million have declined from a 40 percent share of total revenues to a little above 20 percent.
Tai said his company’s strategy now is to focus on high-quality and reasonably-priced products.
For its part, Digital World has reduced its revenue target by 25 to 30 percent this year.
At the end of last year, Digital World expected revenues to increase by 80 percent.
“Now, we’re lucky if we hit a 30 to 40 percent growth,” said the company’s chairman Viet.
Others firms like Samsung Vina are reviewing their targets and many have started to offer discount plans and reduced prices to attract more consumers.
Import Tax Increases
To reduce the trade deficit, the Ministry of Finance has decided to increase cell phone import tax from 5 to 8 percent.
The new tax took effect as of June 20.
However, cell phones imported from China aren’t charged a tax and those from South Korea are only subjected to a 5 percent tax, due to bilateral trade agreements between Vietnam and these countries.
Cell phones from China and South Korea have accounted for around 70 percent of total cell phones imported into Vietnam yearly.
Thanhnien
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