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In era of open markets, Vietnam’s electronics producers are fading away
There was a time when electronics brands Viettronic Tan Binh, Bien Hoa Electronics (Belco) and Hanoi-Hanel dominated the domestic market. Now, though they were given a lot of incentives, they have nearly lost the market to foreign brands, according to Saigon Tiep Thi daily.
The one-time key products of Vietnam’s electronics producers -- CRT TVs, karaoke player or DVD players – no longer have significant sales in urban areas. Their products are now seen only in the boondocks. No one knows the real sales volume of the products, since the producers refuse to give the exact number.
Where are the one-time big guys?
As CRT TV has had its day, the domestic electronics producers have shifted to make new products.
Viettronic Tan Binh (VTB) has put into operation a refrigeration engineering factory which has the total investment capital of $6.6 million and designed capacity of 70,000 products per annum. The factory is making refrigerators under the VTB brand name, while planning to make air conditioners and washing machines from 2010.
VTB said it is also considering making laptop and LCD TVs. Currently, VTB makes a considerable profit from sales of desktop computers, and holds a 10 percent market share. VTB reported 110.7 billion dong in revenues from sales in the first six months of 2009
Bien Hoa Electronics (Belco) is focusing on developing desk computers and amplifiers targetted for sale mainly to low income earners.
Hanel, besides marketing familiar products like CRT TVs and DVD players, now also manufactures LCD TVs, refrigerators, washing machines and digital video recorders. However, Hanel’s products are only seen rarely on the market and not at all on the shelves of many big home appliance centres.
An electronics industry expert comments dourly that developing new products will not help the electronics producers much, since the new products will surely not be able to compete with imports.
In the short term, real estate ventures buoy electronics makers
A Belco manager admits his firm is now in a transitional period, and trying to seek the way out with new products and new business model. Meanwhile, both Belco and Viettronic Thu Duc have shifted to do outsourcing for other producers.
According to Tran Quang Hung, Secretary General of the Vietnam Electronic Industries Association (VEIA), Vietnam-made electronics products cling to a 20 percent market share.
Meanwhile, VEIA’s Chief Representative in HCM City Pham Thien Nghe said that electronics producers have been facing great challenges since they no longer enjoy government incentives.
According to VEIA, domestic electronics products’ handicaps on the home market include monotonous products, underdeveloped supporting industries, a low locally made content ratio, low-and medium technologies and problems in research and development, which all make the products uncompetitive.
Electronics producers that cannot make money with their ‘traditional products’, have to find other ways to make a profit.
“They are trading real estate,” said an analyst.
Sources said that VTB is planning to invest several trillion dong in a project at No 6 Pham Van Hai Street in HCM City. Belco has leased a building at No 97 Nguyen Thi Minh Khai to S-Fone.
On May 28, 2007, the Prime Minister approved an overall development plan for the electronics industry to 2010, with a ‘vision’ to 2020. The plan states that the electronic industry will be developed into one of the important industries of the national economy.
Vietnam plans to gain $4-6 billion in revenues in the electronics sector by 2010 and export $3-5 billion worth of products.
Meanwhile, Vietnam exported only $1.66 billion worth of electronics and computer parts in the first eight months of 2009, while it imported $2.4 billion worth of computers, electronics and electronics parts.
VietNamNet, SGTT
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