Vietnam - Viettronic brand falls into oblivion

VietNamNet Bridge – Like Da Lan, Viettronic was once a “brilliant brand” on the Vietnamese electronics market, but it has fallen into oblivion when foreign manufacturers flocked to the country.

>> Selling brands to foreigners and the great lessons

Viettronics, a brand developed by the Dong Da Electronics Company, became well known on the market in 1990s. Radio cassettes, black-and-white 14 inch TVs bearing Viettronic brand were then sold like hot cakes on the market, where consumers were eager to possess electronic products.

Thai Thanh Long, former Deputy General Director of Dong Da Electronics Company, recalled the day when the company negotiated with Japanese Panasonic on importing electronic parts from the group to assemble products domestically.

There were two choices for Long at that time: either assembling products and selling them under Panasonic brand, or using a Vietnamese brand. Finally, the latter solution was chosen, and domestically assembled products under the brand of Viettronic hit the market.

Viettronnic products then had high quality; therefore, they sold very well on the domestic market, especially when famous Japanese electronics brands remained outside the Vietnamese market.

Viettronic then witnessed its golden age. A series of subsidiaries belonging to the Vietnam Electronics and Informatics Corporations, namely Tan Binh, Thu Duc, Bien Hoa and Binh Hoa also churned out products with Viettronic brand.

However, the electronics brand, which was once a pride of Vietnamese people, could not cement its firm position on the domestic market, when foreign electronics groups flocked to Vietnam to set up assembling factories to enjoy preferential import tariff.

Viettronic Tan Binh then decided to join forces with Japanese Sony group to form up a joint venture, while Viettronic Thu Duc formed up a joint venture with Panasonic and Toshiba.

The joint ventures then began making heavy investment to develop foreign brands, while they spend inconsiderable sums of money to develop the domestic brand Viettronic.

As a result, the domestic electronics quickly fell into the hands of foreigners.

Viettronic was then put under a hard pressure. As the foreign partners raised the electronic parts provided to Viettronic, the production costs increased and became uncompetitive with foreign imports.

Viettronic then shifted to assemble CRT TVs, DVD players with the electronic parts imported from China. However, the low cost products could be sold only in rural areas, while the urban areas were then controlled by foreigners.

However, Viettronic has been dislodged from rural market as well. Tan Binh, Thu Duc, Dong Da still keep Viettronic brand, but they nearly do not have any completed products.

Analysts commented that the disappearance of Viettronic brand showed the unreasonable policy of Vietnam on opening its market to foreigners. At that time, foreign electronics manufacturers could easily make investments in Vietnam, while they did not have to make commitments about the assistance in developing supporting industries or the localization ratio of products.

Especially, Sony did not have to make heavy investment on its workshop. It simply leased the TV assembling line from Viettronic Tan Binh, imported electronic parts for domestic assembling.

After Vietnam joined WTO, Sony gave up the production base after it finished building up the distribution and maintenance network throughout the country, which is a preparatory step for the group to import products to sell domestically.

With the policy, not only one strong brand was eliminated, but the Vietnamese electronics industry also lost its opportunities. The industry still cannot develop so far, while electronics companies have to try other types of business.

Viettronic Tan Binh and Dong Da have jumped into the real estate sector, while Viettronic Thu Duc is earning its living by selling mobile phone simcards.

Tran Thuy

Business & Investment Opportunities 
YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Healthcare and Life Science with expertise in ASEAN. We also propose Higher Education, as a bridge between educational structures and industries, by supporting international programmes. Many thanks for visiting www.yourvietnamexpert.com and/or contacting us at contact@yourvietnamexpert.com

Dear Reader,

May I invite you to visit our new blog: IIMS-Asean http://iims-asean.blogspot.com/

News and activities of the International Institute of Medicine and Science Asean Chapter of IIMS, Inc. California, USA - Health care, Life Science, Education, Research, Philanthropy. Asean is the economic organisation of ten countries located in South East Asia: Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. IIMS is a non-profit organization.