Technology retail systems "fight" over prices

The difficulties of the technology retail market began in the second half of 2022 and the "price war" between technology retail giants also began in the fourth quarter of 2022.

The reason is that after a period of hot growth due to the impact of the COVID-19 pandemic, the demand for technology devices to support learning and working from home, purchasing power gradually weakened, and inventories were high due to incorrect business planning based on expectations of continued growth in 2022. Some large retail systems were struggling.

Retail systems reduce prices to find customers

In the first quarter of 2023, the largest retailer's revenue decreased by 25.7% year-on-year and its after-tax profit reached only VND21.28 billion, down 98.5% year-on-year in 2022, a record low since listing.

The second quarter of 2023 is the most difficult quarter in years for the tech retail industry, even worse during COVID-19.

Major retailers are involved in the most fierce price war in history. Technology companies and distributors are also involved in the "war". Even the iPhone industry, which has never known price reductions, is involved, causing retailers to have negative cost of goods sold and losses.

In the third quarter of 2023, the price war still shows no signs of stopping. Not stopping there, retailers have begun to tighten operating costs to minimize losses, such as laying off employees and closing many inefficient stores.

Market-leading retailers have closed hundreds of stores, laid off thousands of employees, and are expected to continue closing more stores in the near future.

Purchasing power at the end of the year has increased but is still slow.

Mr. Nguyen The Kha, Commercial Director ofFPT Shop system, commented that 2023 is a difficult year for retail businesses in general, especially mobile retail. The demand for technology products is greatly affected by people's tightening spending when their sources of income are affected.

In the days leading up to Tet 2024, smartphone purchasing power has increased quite well and retailers expect the year 2024 to be prosperous. However, Mr. Nguyen Lac Huy - representative of the CellphoneS system, predicts that the market will continue to face difficulties in 2024 because this is not an essential industry.

According to Mr. Kha, for the market to flourish, products need to be equipped with revolutionary, differentiated technology to motivate users to upgrade this year. When all companies participate in this market, the market can hope to explode again.

According to Ms. Phung Phuong - representative of Mobile World, anticipating the shopping needs during difficult times, Mobile World has integrated many optimal and economical shopping methods such as trade-in, exchange old for new without paying extra, 4-no installment payment (no down payment, no interest, no conversion fee, no waiting...) to stimulate consumer demand.

Source: https://nld.com.vn/cuoc-chien-gia-va-lan-song-dong-cua-shop-dien-may-cong-nghe-keo-dai-toi-khi-nao-196240213093928987.htm