How did VinSmart do business before stopping production of phones and TVs?

In 2020, VinSmart has sold nearly 2 million mobile phones, an increase of more than 200% compared to the previous year’s sales and accounting for nearly 13% market share in Vietnam.
Established in June 2018, VinSmart is one of the two main companies operating in the manufacturing division of Vingroup, along with car and electric vehicle manufacturer VinFast.

This manufacturing company now owns a phone and electronic equipment factory with an annual design capacity of 125 million devices. In the most recent year (2020), VinSmart said it sold 1.95 million smartphones to the market, up 225% compared to 2019 sales (600,000 units). One of the two production components of Vingroup With record-high phone sales, VinSmart also became the third largest smartphone supplier in the domestic market with 12.7% market share. This is the first time a Vietnamese phone brand is in the top of the largest manufacturers and consumers in the market. VinSmart sold more than 1.95 million smartphones to the domestic market and exported 1.3 million units in 2020. Photo: Gemini. Notably, in addition to selling phones in the domestic market, in the past year, VinSmart also for the first time recorded revenue from outsourcing and manufacturing original equipment for foreign partners. In it, the company said it had signed a contract and started exporting smartphones to US carriers and foreign customers, with an output of 1.3 million units last year. Returning to the domestic market, VinSmart has now launched 18 smartphone models in the segments from popular to high-end. In addition, this manufacturer has also begun to expand its product portfolio to other electronic devices such as electronic components, air purifiers, etc. In 2020, VinSmart has also become a partner for manufacturing components. blower components for Medtronic PLC ventilators, exported to the US and Ireland. In addition to the production of phones and electronic devices, VinSmart is also the enterprise in charge of building a technology ecosystem for Vingroup’s real estate projects with three core products, including Smart city (member of Vingroup). smart city), Smart home (smart home) and Smart services (digital services). Currently, VinSmart is the contractor in charge of deploying smart city solutions in all 3 major urban areas of Vinhomes including Vinhomes Ocean Park, Vinhomes Smart City (Hanoi) and Vinhomes Grand Park (HCMC). Manufacturing is not prioritized? In the latest announcement, Vingroup announced that it will close VinSmart’s TV and mobile phone production segments to focus on developing high technology for VinFast. This move follows after Vietnam’s largest private group had to withdraw from a series of previous business activities to focus on industry and technology. In fact, although it is one of the two components forming the production division of Vingroup, VinSmart’s activities are always invested much less than VinFast. Specifically, in terms of both investment scale and business results, VinSmart is still very modest compared to car and electric vehicle manufacturers with the same owner. According to the separate financial report of parent company Vingroup in the first quarter, the original value of Vingroup’s investment in VinSmart is estimated at nearly VND 5,000 billion, an increase of more than VND 2,000 billion compared to the beginning of the year. However, this figure is less than a quarter of the value of Vingroup’s investment in VinFast, reaching VND 22,007 billion at the same time. The scale of investment and production activities of VinSmart is much smaller than that of VinFast. Photo: Hoang Ha. Despite being one of two subsidiaries that received additional capital through direct investment in the first quarter, the value of Vingroup’s investment in VinSmart is currently only fifth and much lower than other businesses like Vinhomes (22,981 Billion); VinFast (22,007 billion); Vinpearl (16,992 billion); Vincomerce Holding (5,928 billion). In previous years, the investment in VinSmart was also in the middle and low group of Vingroup’s long-term financial investments in subsidiaries. Regarding business results, because VinSmart’s operating report has not been published in detail, the company’s revenue and profit is still accounted for in the production department along with VinFast. In 2020, the revenue of Vingroup’s production division (including VinFast and VinSmart) reached over VND 18,000 billion, an increase of more than 80% compared to 2019. In which, the leader of this group said revenue increased sharply in the year. thanks to increased sales of cars and smartphones. However, as planned by the leadership of this group continuously, Vingroup’s production division in the same year had a pre-tax loss of nearly VND 14,000 billion. In the first quarter of this year, manufacturing was also one of Vingroup’s high-growth business divisions along with real estate. Revenue from this activity brought the group a total of VND4,825 billion, up 44% over the same period. However, the business results report by division of Vingroup said that this business segment still has a pre-tax loss of 4,814 billion. With the cessation of smartphone and television production, in the coming time, VinSmart will focus mainly on high-tech development for VinFast and partly on Vinhomes’ real estate projects. In addition, part of the factory will be used to process for partners, the rest will be expanded and adjusted to produce new products.