Cell phone producers and distributors alike are fighting for a larger share of the pie with revenues expected to surpass US$1 billion in sales this year.
GFK Vietnam, a market research firm under Germany’s GFK group, predicts eight million cell phones will be sold this year, doubling the figure from two years ago, with projected revenues totaling some US$1.1 billion.
Big and small producers and distributors are working diligently to diversify and improve their products and services in an effort to cash in on this phenomenal surge in demand.
The competition among mobile producers is fierce, with five big brands – Nokia, Samsung, Motorola, Sony Ericsson and BenQ-Siemens – and more than twenty smaller counterparts jostling for greater market share.
With a sizable group of consumers switching to reasonably-priced mobile handsets, producers are vying to offer discount products.
Dinh Anh Huan, the business director at Vietnam’s largest cell phone retailer The Gioi Di Dong, attributes the change in consumers’ taste to a general downward trend in cell phone prices as well as shifting public perception regarding mobile products.
“Cell phones are no longer considered signs of social status as they previously have been,” he said.
According to statistics provided by The Gioi Di Dong, in January this year, 34 percent of customers purchased cell phones within the VND1.5 million – 3 million (US$93 – $188) price range, marking a 24 percent rise from last January.
Last year, Nokia Vietnam introduced a series of economic products, notably the Nokia 1110i phone line, to target rural consumers.
The firm’s president, Benoint Nalin, said the move brought about a 10 percent increase in Nokia’s market share.
Experts say when the local mobile market offers a wide range of prices – from just several hundred thousand up to VND20 million per handset – mobile producers’ success depends on market segmentation and forming effective strategies to capture specifically targeted segments.
For many years, Samsung has ranked second after Nokia in terms of market share thanks to its success in targeting young consumers.
In previous years, Sony Ericsson also had to develop reasonably-priced products in addition to its luxury Walkman brand in an effort to boost its market share.
Motorola has recently improved its market share from just 2 percent to 15 percent thanks to the success of its cheap C310 line.
Since the beginning of this year, the company has started to introduce new products at surprisingly cheap prices.
Its W230 cell phones with music features are now being sold for just VND1.29 million while the luxury V8 line which, of all of its products, fetched the highest revenues last year, is also being offered at VND1 million, less than previous selling prices.
Director of Samsung Mobile in Vietnam Nguyen Hong Chau predicted reasonably-priced products would account for as much as 60 percent of total market sales this year with mobile producers trying to develop new products to cater to different market segments.
Cutthroat distribution market
On the distribution side competition is no less fierce with mobile producers recruiting more than one official distributor, distributors partnering with more than one producer and an increasing number of retailers joining the fray.
Last year, for instance, Nokia selected Petrosetco Distribution as its third distributor after FPT Distribution and Lucky companies, Viettel became the exclusive distributor for FPT Mobile and some Samsung products, and others like Motorola and Sony Ericsson also added new members to their distribution networks.
Official distributors have engaged in fierce competition to extend their networks.
Thanks to its extensive distribution network in the countryside, Petrosetco accounted for as much as 40 percent of total Nokia products sold last year.
Petrosetco Distribution’s Chief Executive Huynh Van Thi said greater competition requires much more accountability from distributors.
In order to compete successfully, the companies must be professional, offer high-quality services, as well as develop a broad distribution network.
Heightened requirements have forced several retailers out of the market.
Nettra, which quickly expanded to 100 shops just three months after it opened in 2006, had to shut down some branches and resell the rest to Viettel last summer due to what mobile experts view as overstrained management and marketing resources.
Those who can meet market demands, including The Gioi Di Dong and FPT Retail, say that the retail arena is big enough to accommodate many more players than now.
The Gioi Di Dong’s President Nguyen Duc Tai said the current mobile market has enough potential to sustain at least three to five professional retail chains.
FPT Retail’s President Le Hoang Hai however cautioned that starting next year, when the local retail market is open to foreign companies’ entry, Vietnamese retailers would encounter intensified competition much greater than at the present.
GFK Vietnam, a market research firm under Germany’s GFK group, predicts eight million cell phones will be sold this year, doubling the figure from two years ago, with projected revenues totaling some US$1.1 billion.
Big and small producers and distributors are working diligently to diversify and improve their products and services in an effort to cash in on this phenomenal surge in demand.
The competition among mobile producers is fierce, with five big brands – Nokia, Samsung, Motorola, Sony Ericsson and BenQ-Siemens – and more than twenty smaller counterparts jostling for greater market share.
With a sizable group of consumers switching to reasonably-priced mobile handsets, producers are vying to offer discount products.
Dinh Anh Huan, the business director at Vietnam’s largest cell phone retailer The Gioi Di Dong, attributes the change in consumers’ taste to a general downward trend in cell phone prices as well as shifting public perception regarding mobile products.
“Cell phones are no longer considered signs of social status as they previously have been,” he said.
According to statistics provided by The Gioi Di Dong, in January this year, 34 percent of customers purchased cell phones within the VND1.5 million – 3 million (US$93 – $188) price range, marking a 24 percent rise from last January.
Last year, Nokia Vietnam introduced a series of economic products, notably the Nokia 1110i phone line, to target rural consumers.
The firm’s president, Benoint Nalin, said the move brought about a 10 percent increase in Nokia’s market share.
Experts say when the local mobile market offers a wide range of prices – from just several hundred thousand up to VND20 million per handset – mobile producers’ success depends on market segmentation and forming effective strategies to capture specifically targeted segments.
For many years, Samsung has ranked second after Nokia in terms of market share thanks to its success in targeting young consumers.
In previous years, Sony Ericsson also had to develop reasonably-priced products in addition to its luxury Walkman brand in an effort to boost its market share.
Motorola has recently improved its market share from just 2 percent to 15 percent thanks to the success of its cheap C310 line.
Since the beginning of this year, the company has started to introduce new products at surprisingly cheap prices.
Its W230 cell phones with music features are now being sold for just VND1.29 million while the luxury V8 line which, of all of its products, fetched the highest revenues last year, is also being offered at VND1 million, less than previous selling prices.
Director of Samsung Mobile in Vietnam Nguyen Hong Chau predicted reasonably-priced products would account for as much as 60 percent of total market sales this year with mobile producers trying to develop new products to cater to different market segments.
Cutthroat distribution market
On the distribution side competition is no less fierce with mobile producers recruiting more than one official distributor, distributors partnering with more than one producer and an increasing number of retailers joining the fray.
Last year, for instance, Nokia selected Petrosetco Distribution as its third distributor after FPT Distribution and Lucky companies, Viettel became the exclusive distributor for FPT Mobile and some Samsung products, and others like Motorola and Sony Ericsson also added new members to their distribution networks.
Official distributors have engaged in fierce competition to extend their networks.
Thanks to its extensive distribution network in the countryside, Petrosetco accounted for as much as 40 percent of total Nokia products sold last year.
Petrosetco Distribution’s Chief Executive Huynh Van Thi said greater competition requires much more accountability from distributors.
In order to compete successfully, the companies must be professional, offer high-quality services, as well as develop a broad distribution network.
Heightened requirements have forced several retailers out of the market.
Nettra, which quickly expanded to 100 shops just three months after it opened in 2006, had to shut down some branches and resell the rest to Viettel last summer due to what mobile experts view as overstrained management and marketing resources.
Those who can meet market demands, including The Gioi Di Dong and FPT Retail, say that the retail arena is big enough to accommodate many more players than now.
The Gioi Di Dong’s President Nguyen Duc Tai said the current mobile market has enough potential to sustain at least three to five professional retail chains.
FPT Retail’s President Le Hoang Hai however cautioned that starting next year, when the local retail market is open to foreign companies’ entry, Vietnamese retailers would encounter intensified competition much greater than at the present.
No comments:
Post a Comment