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Low-cost brands keep crisis doldrums at bay
The local cell phone market rang up good sales amidst the economic downturn thanks to the rising popularity of mass-marketed brands, industry insiders say.
Dinh Anh Huan, sales manager at Vietnam’s leading mobile phone retailer The Gioi Di Dong, said sales at the chain in the first six months rose 20 percent over the second half of last year. He expected sales to increase further in the remaining months.
The better-than-expected results are allowing the retailer to go on with its expansion plan, which was put on hold late last year. Huan said the chain would open three new outlets in Ho Chi Minh City this month, then launch six others through the end of the year.
Hoang Ngoc Vy, director of Vien Thong A mobile phone chain, said despite a gloomy forecast for mobile phone sales this year, the market has achieved good growth rates so far.
Vy said sales at her chain, which has more than 50 retail outlets and service centers, would continue to grow between 5 and 10 percent every month.
She noted that although the number of phones sold at the chain this year has increased 30 percent, sales only rose 15 percent in terms of value as the strongest growth was seen in the low-cost segment.
The mobile phone market was still able to grow amid the downturn thanks to the appearance of many mass-market brands like WellcoM, Mobell, E-touch and Q-Mobile, Vy said.
“These brands now account for as much as 15 percent of total sales at Vien Thong A and the ratio continues to rise,” Vy said, noting the phones are very attractive in terms of price and design.
Huan said with sales of new brands rising rapidly, the market share of big brands, including Nokia, Samsung and Sony Ericsson, at The Gioi Di Dong has shrunk to around 70 percent from 90 percent in 2007.
Low-cost phones, priced less than VND1.5 million (US$84) per unit, are becoming more popular this year, he said.
Many mass-market brands have cooperated with mobile phone network providers to offer cheap packages to consumers, Huan said, adding that 10 percent of the phones sold at his retail chain every month come from those packages.
According to official figures, 8.1 million mobile phones were imported into Vietnam in the first six months, an increase of 30 percent year-on-year. Total import value, however, only rose 1.2 percent to $460.8 million.
Nokia, the world’s top mobile phone maker, was ranked No. 1 in Vietnam. Local brand Q-Mobile of Hanoi-based An Binh Telecommunication took the second place from South Korea’s Samsung.
Most of locally-branded phones are made in China under original equipment manufacturer (OEM) agreements. Analysts said it is still too soon to say if local companies can develop strong mobile phone brands to compete with low priced models of big companies, which still dominate the domestic market.
thanhnien, TBKTSG
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