Low-cost hand phones prevailing
As Vietnamese consumers are tightening their belts and the Finance Ministry has increased import tax rates on mobile phones, low-cost cell phones have emerged in the market.
The mobile phone is no longer a luxury product in Vietnam. Everybody, from students, workers to farmers, owns hand phones. This trend has changed the minds of phone producers, even the most conservative. Nokia, Samsung, Ericsson, LG and Chinese firms have all jumped into the low-cost cell phone market of Vietnam.
In June 2008, the mobile phone market was hit when the Ministry of Finance raised import tax rates on mobile phones to 8%.
In the context of high inflation and the increase of import tax rate on mobile phones, consumers naturally prefer low-cost and even super low-cost cell phones.
At almost all phone shops, low-cost mobile phones have become major products since June.
Le Viet Hung, the owner of a phone shop in Hanoi, said it is easy to sell low-cost mobile phones because there are many kinds of models and customers can quickly make decisions to buy these products.
According to representatives of some big phone shops like Mobile World and Viettel, cell phones of less than VND1.5 million account for more than 50% of their sales, 40% of which are products priced under VND1 million.
According to GfK, a market research firm, the average price of mobile phones in Vietnam will fall remarkably, from over VND2.7 million to around VND2.3 million. The average price may fall further to less than VND2 million in late 2008.
It is because, simply, the ratio of low-cost cell phones, priced less than VND1 million, is increasing.
Mobile service providers are also following this trend by providing service packages for low-income customers. MobiFone recently offered MobiQ services for students and Mobi365 for low-income earns. Accordingly, one can use mobile services with VND70,000 of charges per month.
VNN
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