The Gioi Di Dong’s (Mobile World) public relations executive confirmed that consumer purchasing power of mobile phones and home appliances dropped dramatically in 2023. 

Nguyen The Kha from FPT Shop said 2023 was a tough year for all mobile device retailers as demand was affected by consumers' tightening their purse strings.

The mid-end market segment, with the largest market share, suffered more heavily than other segments. High-end products found buyers, if they had new and attractive features. The iPhone 15 Series, with titanium border, which set new standards for mobile phone products, and Samsung Galaxy S24 Series, integrated with AI, were two typical examples.

Phung Phuong from Di Dong  Viet (Viet Mobile) said retailers in 2023 had to struggle as demand was not high though new product flagships were launched and caught the public’s attention.

According to CellPhoneS’ Nguyen Lac Huy, difficulties first occurred in the first quarter of 2023. The largest retailer saw revenue drop by 25.7 percent and post-tax profit 98.5 percent compared with the same period in the year before, its lowest figure since the day it began listing shares on the bourse. Gross profits fell from 22.3 percent to 19.2 percent.

Huy said the second quarter in 2023 was the most difficult period for retailers for many years and the situation was even worse than during Covid-19 in 2021-2022.

Retailers, as well as manufacturers and distributors, became involved in a fierce price war, which caused many retailers to incur losses. CellphoneS saw its revenue drop by 20 percent compared with the first quarter and began seeing a minus growth rate of (-) 2.6 percent compared with the second quarter in 2022.

The price war continued in the third quarter, though revenue partly improved when students returned to school in September and iPhone 15 series were launched.

The market in 2024

Retailers told VietNamNet that the mobile device market would still be in difficulty this year. They will have to struggle to exist with sale promotions and new products. 

Phung Phuong from Di Dong Viet said 2024 will be a year full of challenges, since users will continue to cut spending.

The retail chain will use new sale methods, including trade-in and ‘the four no's’ purchase by installment (no initial payment, no interest rate, no conversion fee and no waiting).

Retailers hope the market will be more bustling if super hi-tech products are introduced. Buyers may spend money if they find the products attractive enough.

Meanwhile, The Gioi Di Dong said it would continue to apply financial solutions to support buyers, including a zero percent interest rate policy for purchase by installment and a low initial payment of 10 percent.

Huy of CellphoneS believes the price war in 2024 won’t be as strong as the period from late 2022 to the end of the third quarter 2023. 

The goal of retailers, especially listed retailers, is having a good profit in 2024. To reach that end, they should not continue to run the price race. By contrast, flagships will be sold at higher prices which can bring higher gross profits.

Kha of FPT Shop said the mobile device market performance will rely on models equipped with revolutionary features, such as AI-integrated smartphones which can implement complicated tasks in a simple way. 

Customers may also like products which are super durable but thin, light and shiny. Kha thinks that folding phones will be trendy.

Trong Dat