Vietnam - Chinese terminal manufacturers meet big difficulties in Vietnam

VietNamNet Bridge – Joining the Vietnamese market tens of years ago as the network infrastructure item suppliers to mobile service providers, but Huawei and ZTE still cannot cement their firm positions on the market.

With big ambitions in the Vietnamese market, Huawei and ZTE have been trying to expand their business in recent years. Not only acting as the network infrastructure suppliers, they have also been making and trading mobile products.

Bui Van Hoa, Deputy General Director of Vien Thong A, one of the biggest hi-tech product distribution chain in Vietnam, commented that both ZTE and Huawei cherish ambitious plans to exploit the Vietnamese market. He also said that both ZTE and Huawei have advantages in the technologies and the production process, which allow them to churn out the products with higher quality than some other brands.

The big ambitions

On May 18, 2011, ZTE chose Vu Hoang Hai Company in HCM City as its sole distributor of over 10 products, from low cost mobile phones, tablets to smart phones and USB 3G.

Ying Kaner, Marketing Director of ZTE in Asia Pacific, affirmed that being a big name in the digital device production sector, the products bearing ZTE brand must appear in an official way around the globe, including the Vietnamese market.

“The official way”, according to him, means that the digital products bearing ZTE brands, not the products it once made under the outsourcing contracts signed with Vietnamese network operators.

Under the agreement by ZTE and Vu Hoang Hai, the Vietnamese distributor needs to have the sales of 20 million dollars at least in 2011.

However, Vu Trong Huu, Director of Vu Hoang Hai Company, later said the targeted sales turnover of 20 million was too high, asking to reduce the targeted turnover to 15 million dollars.

Huawei, which is now the Number One mobile device manufacturer, proves to be by far better than ZTE in all aspects. However, the path of the group to conquer the Vietnamese market has also been thorny.

Huawei entered the Vietnamese market 15 years ago, but at that time, it only targeted the technical infrastructure of Vietnamese mobile network operators, such as Viettel, VinaPhone, MobiFone.

In 2006, Huawei began making ADSL connection devices for Internet service providers such as FPT or VNN. In 2009-2011, Huawei made low cost mobile phones or USB 3G for domestic network operators such as Viettel or VinaPhone.

Laying down arms

Regarding the cooperation story between ZTE and Vu Hoang Hai, opinions from the well informed circle said that Vu Hoang Hai failed completely in the deal with ZTE, which started a new not-so-prosperous period the distributor.

Huawei has never revealed the income from the outsourcing of low-cost mobile phones and USB 3G for network operators.

An executive of a telco confirmed that for the last many years, Vietnamese mobile network operators ordered Huawei to make low-cost mobile products, and then sold the products under their brands, mostly to the customers in rural areas. However, since the demand became weak, the cooperation has ended since late 2011.

A salesman of Viettel has confirmed that Viettel no more sells the products made by Huawei. Three Vietnamese biggest network operators – VinaPhone, Viettel and MobiFone, which were once Huawei’s strategic partners, have become the sales agents for big brands such as Apple or BlackBerry.

Viettel now can manufacture USB 3G and mobile phones and smart phones. VinaPhone and MobiFone are no longer interested in trading the devices because of the low profits.

Compiled by Thu Uyen

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