A difficult year 2023 for the mobile market
Economic difficulties, reduced purchasing power, and price wars have caused the mobile market in Vietnam in 2023 to experience many difficulties for retailers.
According to the media representative of Mobile World , in 2023, the purchasing power of phones and electronics has decreased sharply. Especially for phones, most segments and brands have decreased compared to 2022. The reason for this is due to the macroeconomic situation, users' income has decreased sharply, phones are not essential goods or necessities, so they are no longer a priority choice.
Sharing the same view, Mr. Nguyen The Kha, Commercial Director of FPT Shop System, also said 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 income sources are affected.
Mr. Nguyen The Kha said that the mid-range segment with the largest market share was heavily affected when it had a larger decrease than the rest. However, there are still bright spots for customers buying the high-end segment, as long as the product has enough different appeal for customers to decide to upgrade. For example, the iPhone 15 Series with a Titan bezel design creates a new standard for products (light, durable, beautiful), or the Samsung Galaxy S24 Series with AI integration (friendly, intuitive and practical with user needs).
Another reason why mobile market retailers will have a hard time in 2023 is the price war.
According to Ms. Phung Phuong, media representative of Mobile World, 2023 is a year when the retail market struggles to overcome the crisis, market demand is not too high even though new super products still create a good effect; many agents are forced to bear losses to stay close to the market.
Analyzing more closely the mobile retail market in 2023, Mr. Nguyen Lac Huy, in charge of communications at CellPhoneS, said that by the end of the first quarter of 2023, the general business situation began to face many difficulties. The largest retailer decreased by 25.7% over the same period and recorded after-tax profit of VND 21.28 billion, down 98.5% over the same period in 2022, a record low since listing. This came from a decrease in revenue due to low market demand and a price war that reduced gross profit from sales from 22.3% to 19.2%.
According to Mr. Nguyen Lac Huy, Q2/2023 is the most difficult quarter in many years for the technology retail industry, even worse than during the Covid-19 period of 2021 - 2022. Major retailers are involved in the most fierce price war in history, both companies and distributors are involved, price-sensitive product lines such as iPhone are most affected and all product lines are "price-war" with low profits, even negative cost of goods sold. Q2/2023 causes many retailers to start losing money as revenue continues to decline and gross profit margin is too low. Even CellphoneS has a 20% decrease in revenue compared to Q1 and starts to grow negatively -2.6% compared to Q2/2022.
By Q3/2023, the price war still shows no signs of stopping. In terms of market revenue, it was somewhat saved by the "back to school" sales season in September, which saw the launch of the iPhone 15 series.
2024: Struggling to overcome the waves
Retailers said that in 2024, the mobile retail market will continue to experience many difficulties and challenges, requiring them to overcome the waves with incentive programs and wait for hope for new products.
According to Ms. Phung Phuong, representative of Mobile World Communications, 2024 will continue to be a challenging year, as technology users are likely to tighten spending, and the market will still need to brace itself to overcome the waves.
Faced with this difficulty, Mobile World will continue to integrate many optimal and economical shopping methods such as trade-in, exchange for new, upgrade without paying extra, installment payment "4 no": no down payment, no interest, no conversion fee, no waiting. At the same time, hopefully the market will be brighter when impressive technology super products are born, dealers have many optimal and economical shopping methods, easy.
To support customers and stimulate shopping, in 2024 Mobile World will continue to exploit financial support solutions such as 0% installment payment, 10% down payment...
Similarly, Mr. Nguyen Lac Huy, in charge of communications at CellphoneS, said that in 2024, the price war will no longer be as fierce as from the end of 2022 to the end of the third quarter of 2023. The goal of retailers, especially retailers listed on the stock market, will be a profitable year in 2024. To do that, it is impossible to maintain price wars and on the contrary, there will be many exclusive products sold at higher prices, with higher gross profits than previous years.
Meanwhile, Mr. Nguyen The Kha, Commercial Director, FPT Shop System, said that in 2024, the mobile market will hope for phones that are integrated or equipped with revolutionary 'differences', which will motivate users to upgrade such as: Integrating AI to solve complex tasks in a simple way, not only saving time but the device also acts as a real assistant when learning and improving to produce smart results. Or super durable phones that are still thin, light and shiny. Besides, foldable screen phones can also become a trend.
“Although the contribution rate of foldable phones is not high yet, with companies investing heavily and always prioritizing bringing these product lines to Vietnam, the market will certainly have growth steps and contribute double digits in the next 3-5 years,” Mr. Nguyen The Kha shared.
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