VinSmart’s decision to stop making smartphones and TVs is considered the right one, even though the company already has a significant market share.
On May 9, Vingroup announced that VinSmart will close the television and mobile phone segments. VinSmart brand was established in June 2018. In just 3 years of business, the highest achievement that VinSmart has is the top 3 market share in a month in the Vietnamese market. The decision to terminate the smartphone and TV segment was made quite suddenly by the company because a few months ago, it sold their products in the US market.
Existing for 3 years, VinSmart sometimes reached the top 3 in terms of smartphone market share in Vietnam. No more Vietnamese phones that can compete “My feeling was surprise and disappointment when I received this information. During the VinSmart product business, The Gioi Di Dong assessed that this brand has gained competitiveness in certain segments. Their products are not inferior to other competitors”, a representative of The Gioi Di Dong, the smartphone retailer with the largest market share in Vietnam, shared. Zing . VinSmart is able to compete with other brands in the smartphone field. Meanwhile, the second retailer in the market, FPT Shop, also evaluates that VinSmart’s smartphones are capable of competing with other brands. “FPT Shop and consumers will regret it when Vietnamese brands gradually withdraw from the smartphone market. This is an area that requires constant and very fast updates. However, the mobile phone market has always had a very high level of competition,” said Nguyen The Kha – Head of Mobile Telecommunications Sector FPT Shop, expressing his regret at VinSmart’s announcement to stop the mobile segment. According to FPT Shop, VinSmart’s smartphones are beautifully designed, well-configured and reasonably priced. Vsmart competes strongly with brands from China. In the price segment of less than 4 million VND, Vsmart always has product lines such as Live, Star or Joy that compete well and, above all, are guaranteed for up to 18 months. VinSmart’s competitiveness is shown through numbers, not words. According to market research firm GfK In March, the market share of Vsmart-branded smartphones in Vietnam was 8.2%, ranking 6th in the domestic market. VinSmart achieved a market share of 12.1%, entering the group of 4 best-selling smartphone brands in Vietnam in December 2020. Previously, in October 2020, the company ranked 3rd with 10.5% market share. VinSmart was born in June 2018, and introduced the first smartphones 6 months later. After nearly 3 years of development, Vsmart has launched 19 phone models and 5 TV models. In June 2020, VinSmart announced that it had sold 1.2 million phones. Thus, with the stop of VinSmart, the Vietnamese mobile market still has a name called Bphone of Bkav. However, Bphone 3 has been sold since 2018 with undisclosed sales. Meanwhile, the B40 model was introduced in May 2020, but so far, after a year, this device has not been sold on the market. Model B86 has been discontinued from retail chains. Right decision “I was surprised when I received the news that VinSmart stopped the mobile and TV business. The first feeling is regret when losing a Vietnamese smartphone brand but fully support this decision. This is the right decision in the new context, specifically the epidemic,” said Mai Trieu Nguyen, owner of the Mai Nguyen mobile retail chain. Stopping the smartphone segment and focusing on electric cars is the right direction for Vingroup. According to Mr. Nguyen, besides needing capital to focus on developing VinFast, Vingroup also has to deal with the scarcity of processor chips in the whole industry. “In the context of Covid-19, chips are scarce. Without a chip, there would be no smartphone, the whole line had to wait for a supplier. A smartphone has a lot of chips. This dependence only makes the situation worse. Not to mention that chip suppliers often give preference to partners who sell in larger quantities,” Nguyen predicted the reason VinSmart stopped the smartphone business. At the same time, Mr. Nguyen also gave an example of another Vietnamese brand, Mobiistar, which also stopped doing business because of difficulties in the supply chain. “Mobiistar has tried to overcome difficulties in the component supply chain by selling in India. When the sales volume is large, the company is better able to negotiate components with suppliers,” said Mr. Nguyen. Meanwhile, Apple and Samsung, the two leading brands in the supply chain are also facing difficulties when processor chips are scarce due to the epidemic. Some other companies have had to postpone the product launch date because of a lack of components. According to experts, the decision to dissolve the business segment that has been built for 3 years and has a good market share is not easy. I really respect the executive brains because this is the right decision of VinSmart in the new context, namely the epidemic. Mr. Mai Trieu Nguyen, owner of mobile retail chain Mai Nguyen Previously, HTC and LG also hesitated for a long time before deciding to withdraw from this fiercely competitive market. “They wait too long only to push them into debt and loss. Vingroup’s management team is more assertive. What area has no future they boldly cut out. Buying and closing Vien Thong A or closing VinMart is one of their timely decisions,” said Nguyen. In addition, the electric car market is being evaluated as having the most potential for growth because this segment is still in its infancy. “Famous names in the technology industry such as Huawei, Sony, Xiaomi, Oppo all have plans to change direction. So it is very understandable that VinGroup closes the phone segment to seriously invest in electric cars. But honestly, emotionally, I still regret losing a Vietnamese brand in the smartphone market,” Nguyen concluded. Leaving the popular group market share for Oppo, Xiaomi VinSmart’s products are considered to focus on the segment under VND 4 million. In this segment, brands like Oppo, Xiaomi, vivo and even Samsung have competitive representation. The most obvious is the top 10 best-selling smartphones of GfK In the first quarter of 2020, there were 7 models priced under 5 million VND. Names like Samsung A12/A02s/A12/M15, Oppo A12/A15/A53 are typical examples for the strategy of using low-priced smartphones to capture market share of brands. In the smartphone segment under VND 5 million, companies like Samsung, Oppo, Xiaomi or vivo all see this as a place to capture market share. Low-cost phones make it easier for carriers to reach consumers, thereby creating loyal customer groups. This is an indispensable segment of a brand, although the profit performance may not be as high as that of high-end smartphones. Besides VinSmart, Bphone is the last Vietnamese brand that produces smartphones. According to the latest data from GfK , VinSmart accounted for 9.3% of Vietnam’s mobile market share in February 2021. The absence of VinSmart will leave a gap for brands with strengths in the popular group. “The appearance of Vsmart even in a short time with abundant financial potential, has taken more than 10% of the smartphone market share from foreign firms. This affirms, we Vietnamese people always crave and supporting ‘Make in Vietnam’ products, especially Smartphones,” said Bphone CEO Nguyen Tu Quang. Without VinSmart, the market would only be Bphone, a Vietnamese brand capable of launching new smartphones. However, Bkav’s latest product has been delayed for nearly a year. Besides, Bphone’s market share competitiveness is still not really convincing when sales figures have not been announced.
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