The pressure from the “big guys”
In 2010, Nokia began launching a series of low cost products in a campaign to conquer the market of products for popular people. In 2011, LG also began targeting the market segment.
It is clear that the fame of Nokia and LG brands has helped them win the competition in the low cost market segment – the main market for Vietnamese-brand mobile phones.
Meanwhile, Vietnamese brand developers, who did not anticipate the purchasing power decreases and the pressure from the “big guys”, decided to store big amounts of products earlier this year, and hoping to sell out all the products soon. However, the sale of Vietnamese brand mobile phones has been going very slowly so far this year.
“Two manufacturers still have 400,000 products in stocks,” a source said.
Nguyen Quang Minh, Director of ABTel Company, the owner of Q-Mobile, has confirmed that the purchasing power is weak; therefore, the company only orders limited amounts with its outsourcing partner.
Le Trung Thanh, General Director of FPT Trading, refused to give answer about the inventory volume because of “some delicate reasons” and because the “figures have not been updated.”
Nguyen Quoc Bao, Director of Thanh Cong Mobile, the owner of Bavapen brand, said that his company has only imported 10,000 products so far this year.
“The market conditions are not good, therefore, the more we import, the bigger loss we will suffer. The amount of 10,000 products is enough to bring the loss of several billions of dong,” he said.
Meanwhile, a source said that he knows a manufacturer who has incurred the loss of 50 billion dong because he vowed to fight against Nokia and other Vietnamese brands. The manufacturer stored a big volume of products which remain unsalable.
In order to survive, a lot of Vietnamese brand owners have to resume their old way of doing business: instead of focusing on developing Vietnamese brands, they now distribute the products of famous brands as well. VHH, for example, besides its products, is now distributing the products of ZTE, and Huawei, while Dai Duong is now the distributor of Lenovo brand products.
Meanwhile, some manufacturers have decided to jump into the new market segments by developing new products. FPT, for example, has conquered the tablet PC by launching FPT Tablet products, priced at 4.99 million dong.
As for ABTel, Minh said that the wise move to do at this moment is to spend time on restructuring and positioning products.
Vietnamese-brand products not attractive
Minh of ABTel has admitted that there are a lot of Vietnamese-brand mobile phone products, but there is no product which is really attractive. ABtel once launched the “strategic product” – S10, which operates on 3G with Android 2.2 operation system. However, the product could not conquer the market because of the high price of 4.29 million dong.
In the market segment, people would choose the products with well known brands such as Samsung, LG, HTC and Acer instead of S10.
FPT has F5 with very reasonable price of 2.75 million dong, with Android 2.2 operation system and wi-fi. However, the product can only run on GPRS, while many Android’s apps can run better on the 3G basis.
Vu Quoc Viet Nam, Marketing Director of Vien Thong A, a big distributor, said that in order to revive Vietnamese brands, manufacturers need to upgrade their products with new facilities, functions and cooperate with content providers such as games, music, film, ebook and TV.
FPT with F-Store, and ABtel with Q-Store are trying to develop the content stores in order to attract more customers. However, analysts have warned that the content stores would not help, because low income earners, the main clients of Vietnamese brand mobile phones, only use mobile phones for basic operations, including making messages and calls.
SGTT
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