VietNamNet Bridge – A lot of home appliance centers have shut
down because of the sharp fall of the market demand. Meanwhile, many new
investors still have joined the market, because they believe that it’s now the
golden opportunity to start up business.
The market demand depressing
Commenting about the business
performance in the first six months of 2012, Nghiem Xuan Thang, Managing
Director of Tran Anh Digital World Company, said the purchasing power has
decreased continuously since mid-2011.
As for Tran Anh distribution
chain, the sales in the first half of the year increased only by 6.3 percent in
comparison with the same period of 2011. The growth rate is considered modest
for such a big distribution chain, which has opened a new supermarket in Long
Bien district in Hanoi.
Meanwhile, the pretax profit of
the distributor has also decreased due to the higher sale costs the distributor
has to bear when opening new retail points.
Other big distributors such as
Pico, Media Mart, Top Care, Viet Long, Nguyen Kim and Best Carings have all
complained about the decreases in sales, saying that the business has become
worst than ever.
An executive of Pico said the
demand for home appliance products has dropped by 50-70 percent from late 2011.
Some home appliance centers in Hanoi can earn 100 million dong in turnover
every day, while they previously got tens of billions of dong a week.
In general, distributors have to
pay 15-20 percent more money to cover the increasing expenses. Meanwhile, since
the weak is demand, they have to continuously run sale promotion campaigns,
offering the price discounts of up to 50 percent.
Best Carings in Phu My Hung new
urban area in district 7 of HCM City shut down in early 2012. Media Mart then
closed the retail shop on Nguyen Chi Thanh Street in Hanoi. At Pico Mall at No
229 of Tay Son street, a lot of stalls have been left unoccupied. Other home
appliance centers in Hanoi, Can Tho have also been simply dragging out their
miserable existence.
Still rushing to open new
supermarkets
Admitting that the home appliance
market would prosper no sooner than by the end of 2013, but a lot of investors
still have decided to open more retail shops at this moment.
Media Mart has opened the fifth
supermarket at No. 3 of Nguyen Van Linh Street. Top Care has also opened its
third supermarket in at Melinh Plaza in Ha Dong district, and LG Brand Shop on
Lang Ha Street.
Tran Anh has revealed the plan to
inaugurate a new supermarket on Dai Co Viet street which covers an area of 2500
square meters. It also plans to open one more retail shop in Thanh Xuan
district by the end of the year.
Pico has been marching towards
the southern market with the opening of a 55,000 square meter shopping mall
which includes a home appliance supermarket on Cong Hoa Street, the main street
in Tan Binh district.
Nguyen Kim has also announced two
home appliance centers would be opened by the end of the year, one in Hanoi and
the other in Hai Phong City.
Ngo Thanh Dat, Marketing Director
of Tran Anh distribution chain, said that one would be able to save money if
setting up retail shops right now, when the business premises rentals are low.
In the past, one would have to
pay 30 dollars per square meter a month, while he now can lease the premises
now at less than 20 dollars.
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
No comments:
Post a Comment