vietnam smartphone sales Archives

Vietnam Smartphone Shipments Double QoQ in Q4 2021, Up 15% YoY; Samsung Retains Top Spot

Vietnam’s smartphone shipments soared 104% QoQ in Q4 2021.
Samsung retained the top spot, capturing 28% share, followed by vivo (18%) and OPPO(17%).
With its iPhone 13, Apple surpassed Xiaomi to rank fourth, its best ever show in Vietnam.
For the full year of 2021, smartphone shipments increased 7% YoY.

Beijing, Seoul, Taipei, London, Boston, Toronto, New Delhi, Hong Kong – February 10, 2022

Vietnam’s smartphone shipments increased 15% YoY and 104% QoQ in Q4 2021, according to Counterpoint Research’s Monthly Vietnam Channel Share Tracker. After crossing the post-pandemic phase of pent-up demand, smartphones remained in high demand throughout the year, despite the market facing many difficulties, including macroeconomic worries, supply chain issues and the emergence of new COVID-19 variants. The year 2021 also saw Samsung and Apple registering their highest ever shipments in Vietnam.

Top OEMs’ Market Share in Vietnam, Q4 2020 vs Q4 2021

Source: Counterpoint Research’s Monthly Vietnam Channel Share Tracker
Notes: Xiaomi includes POCO and Redmi; OPPO includes OnePlus; Figures may not add up to 100% due to rounding.

Commenting on the quarterly performance, Senior Research Analyst Ivan Lam said, “Vietnam’s smartphone market has been dominated by offline channels. COVID-19 forced the government to impose multiple lockdowns, which hugely impacted the mobile phone distribution chain. As a result, shipments in Q3 2021 reached their lowest point in 2021. A few key positive factors drove up the numbers in Q4 2021. First, increasing vaccination rates helped offline channels move towards normalcy. Second, Apple’s iPhone 13 and other new launches, some pent-up demand and the approaching Vietnamese Lunar New Year stimulated purchase activities. Third, Samsung and Chinese brands managed to resume their supply and logistics activities in Vietnam. Lastly, the country’s major cities such as Ho Chi Minh City released guidelines that required people entering these cities to show a QR code from a mobile app to prove their vaccination status or recovery from COVID-19. This also pushed people to switch to a smartphone or an upgrade.”

Apple was the fastest growing brand in Q4 2021 in YoY terms. With a hair’s breadth, it surpassed Xiaomi to capture the fourth highest market share during the quarter. Lam added, “Apple enjoys a good place among Vietnamese consumers. In 2021, Apple enhanced its distribution strategy in Vietnam. It pushed online sales through Lazada Apple Flagship Stores and boosted “mini Apple Stores” by working with retailers, although there are already Apple Zones in Thegiodidong stores and F.Studio in the FPT shops system. Also, in Vietnam, 5G smartphone penetration is increasing gradually, supporting iPhone 13 sales.”

Vietnam Smartphone Shipment Share, 2020 vs 2021

Source: Counterpoint Research’s Monthly Vietnam Channel Share Tracker
Notes: Xiaomi includes POCO and Redmi; OPPO includes OnePlus; Figures may not add up to 100% due to rounding.

Vietnam’s smartphone shipments grew 7% YoY in 2021. Research Director Tarun Pathak said, “Vietnam is one of the most active consumer electronics markets in Southeast Asia, as well as one of the Asian countries with highest internet penetration. Although COVID-19 continued to disrupt the market, the demand was always there. We expect this rebound to continue in 2022.”

Apple showed the highest YoY growth in 2021 at 119%, followed by vivo at 24% and Xiaomi at 19%. Although OPPO (including OnePlus) ranked second in terms of market share in 2021, its growth declined 6% YoY during the year. Senior Research Analyst Glen Cardoza said, “OPPO was hugely impacted by the COVID-19 lockdowns in Q2 and Q3 because its main strength is offline channels. Also, OPPO experienced a shortage of 4G SoCs. However, it bounced back in Q4, showing 88% QoQ growth. We see OPPO showing stable performance in 2022.”

Online channels made up 15% of the total shipments in 2021, growing 8% YoY. It’s not a big jump because the country’s logistics systems and digital payment ecosystem are still in the process of being developed.

Despite all difficulties, Vietnam’s smartphone market is expected to continue to grow in 2022 and be one of the most competitive markets in Southeast Asia.

Please reach out to press (at) counterpointresearch.com for press comments and enquiries.

You can also visit our Data Section (updated quarterly) to view the smartphone market share for World, US, China and India.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media, and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects, and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts:

Ivan Lam

Glen Cardoza

Tarun Pathak

Follow Counterpoint Research

Vietnam Offline Channels Successfully Embracing Online

Vietnam’s mobile phone market is dominated by offline distribution channels. However, responding to the changing times, offline channels have been trying to embrace the online mode, with some of them achieving big success.

Hanoi, the country’s capital, opened in late September after the COVID-19 lockdowns, while Ho Chi Minh City (commonly known as Saigon), the country’s largest city, opened a little bit later. While hugely impacting the economy, the lockdowns also pushed online sales to new heights. Retailers like Mobile World Group (MWG), which owns the highest number of offline shops in Vietnam, registered record online sales. According to an August financial release, MWG’s online revenue contributed 17.5% of its total revenue with 17% YoY growth, undoubtedly a big achievement for the offline channel giant. Thegiodidong (TGDD) and Dien May Xanh (DMX), the MWG chains selling mobile phones and consumer electronics, together accounted for 51.5% of the total group revenue.

TGDD, which means “mobile world” in English, built its standing in the market as a chain of stores selling mobile phones and related 3C products.

In July this year, COVID-19 started spreading rapidly in Vietnam. More than 70% of the offline stores and shops in the country had to be closed due to the restrictions. The situation worsened in August and September. In Saigon, the military had to be called in to enforce social distancing. Only essential stores and deliverymen were allowed to function in the key cities.

With offline channels dominating Vietnam’s mobile phone retail, the COVID-19 impact was severely felt by major OEMs like Samsung, OPPO and vivo, which had been mainly focusing on building offline retail in the country. Even Xiaomi, an internet brand, had to rely on national distributors to cover main offline channels. The lockdown surely made an impact on these leading brands’ distribution strategies.

In such a situation, offline retailers like TGDD and DMX, which had been strategically investing in online business for a while, reaped unexpected benefits. TGDD and DMX’s website experience is as good as pure e-commerce players in the mobile phone and consumer electronics domain. Apart from TGDD, there are offline store chains like Viettel and FPTShops which have also been investing in online stores at different levels.

With the easing of social distancing norms in many provinces and cities in Vietnam from the second half of September, retail businesses are expected to recover. However, even after regaining normalcy, the shift towards online will not stop.

Not just Vietnam, the whole of Southeast Asian mobile phone and consumer electronics market is heavily dependent on offline channels. But with the pandemic, the region’s leading e-commerce platforms in consumer electronics, like Lazada, Shopee and Tiki, have been reporting robust numbers. On the other hand, offline retail chains have been facing the most painful challenges. Online and offline channel constructions are totally two different business models, requiring two sets of strategies, teams and finance models. Thanks to the solid financial support it gets, TGDD has been able to develop its online business and hence limit the damage due to the lockdowns. Other store chains in the region, such as Jaymart Thailand and Erajaya Indonesia, are also keen to embrace the e-commerce era and the new normal.

For the market, it is a good sign that the distribution structure is evolving and becoming more diverse.

Will Vietnam Produce Another VinSmart?

In May this year, Vietnam’s Vingroup announced that its subsidiary VinSmart would stop manufacturing smartphones and televisions. “The production of smartphones or smart TVs no longer brings breakthroughs and creates unique values for users,” said Nguyen Viet Quang, vice-president and CEO of Vingroup. Quang set up VinSmart in 2018 with an aim to raise Vietnam’s smartphone R&D and manufacturing to another level.

VinSmart’s future strategy will take three directions — R&D for VinFast, Vingroup’s carmaker unit; IoT solutions for vehicles and homes; and winding down the smartphone production for partners, such as some US carriers. While the VinSmart’s move looked wise against the backdrop of ongoing component shortages, the real logic working behind the decision is more complicated than expected.

Original Design Manufacturer (ODM) vs ‘Made in Vietnam’

Prior to VinSmart’s exit, a few popular Vietnamese mobile phone brands had already disappeared from the market, such as Q-mobile, Mobiistar, and FPT Mobile. Q-mobile quit the market quite early, around the time the Android smartphone segment started heating up. Q-mobile failed due to cash flow issues stemming from its smartphones’ average cost being two to three times compared to a normal feature phone. Mobiistar tried expanding to India, the second-largest market, to counter competition in its domestic market. Although Mobiistar entered India in a joint venture with a Chinese manufacturer, it was still a wrong move because India was already a very competitive market.

These failures of local brands can be pinned down to their business model. Most of them relied on ODMs (mainly based in China), which means outsourcing design and manufacturing to some other firm. But the Chinese brands, with their manufacturing and supply chain advantages, didn’t take much time to beat the local firms.

Secondly, most of the Chinese ODMs provide Android turnkey solutions, with only minor customizations for the local brands, such as housing, wallpapers, and ringtones. However, with the Vietnamese consumers already becoming used to the variety of features and improvements offered by international brands, the local companies found it difficult to keep pace.

Thirdly, establishing and building a mobile phone brand involves cash burn. But brands like Q-mobile, Mobiistar, and Masstel had no such solid capital. With squeezed margins, it is super-easy to block cash flow. For example, 10,000 handset units costing $50 per unit mean $500,000 worth of goods. But in case these units fail to sell, it would take more than three months to convert this stock back into cash. And for a local brand, $500,000 is a big amount.

Therefore, the ODM business model is very challenging for local brands. But in the light of the abovementioned challenges, VinSmart got a head start. It was backed by Vietnam’s biggest business group, which believed in promoting ‘Made in Vietnam’.

Was VinSmart a Success?

Looking at VinSmart’s past performance, it ranked among the top four OEMs (by volume) both in Q1 2020 and Q1 2021.

Vietnam Smartphone Market Shipment Share

VinSmart managed to impress the market and consumers alike. The channels were happy to have such a ‘Made in Vietnam’ brand on their shelves. The key selling points (KSPs) for VinSmart were:

Made in Vietnam (Manufacturing).
R&D in Vietnam after teaming up with Spain’s BQ.
Cost-effective and better than Xiaomi.

All this made VinSmart stand strong in the $150 and below segment (wholesale price). As much as 70% of VinSmart’s smartphone sales came from this segment.

From a strategic point of view, it is reasonable and practical to scale up the volume in the mid-low segment and then climb up the value chain by frequently launching flagship models. For sure, VinSmart was in for a bright future.

Why VinSmart Decided to Exit Market?

The news of VinSmart exiting the smartphone and television business was indeed sensational. Besides the obvious reasons, there were still some unfathomable causes behind the move.

VinSmart entered Spain, Russia, and some other markets even when that would have meant increased brand-building and other expenses. What triggered the foreign foray was the size of Vietnam’s market. The country, with around 100 million population, sees a mobile phone volume of around 2 million per month, of which VinSmart had a 10% share. The company’s ambitions were far bigger to be satisfied by this user base. And that, in turn, contributed to the latest move.

On the R&D front, the results were not strong enough to differentiate VinSmart from other brands. Its OS, called VOS, was just a customized Android OS.

Vietnam’s government is keen to transform the country into a manufacturing giant. In the long run, Vietnam’s development heavily relies on foreign investment and overseas markets. Foreign companies in Vietnam take up 70% of its foreign trade. As much as 25% of Vietnam’s total exports are taken by Samsung, which set up its first smartphone production line in the country around 10 years ago. However, Samsung’s arrival started to change the industry’s labor structure in Vietnam. Top-quality manpower became difficult to find for VinSmart even as it strived for ‘Made in Vietnam’.

To conclude, VinSmart had no choice as both resources and core competencies were in short supply to sustain the ‘Made in Vietnam’ push.

Market after VinSmart

Today, if we visit the website of Thegiodidong, Vietnam’s biggest organized chain store, there are only Masstel and Vsmart in terms of local brands. Masstel has only feature phone models on sale with the highest price of 550,000 VND (~$24). So, is this an end for local brands? Right now, the answer seems ‘no’. It is unlikely that any local brand will rise in the near future to capture the space vacated by VinSmart and take on the international biggies.

Mobile World (thegiodidong.com) Mobile Phone Category Capture Jul 2021

However, Vietnam’s government has a clear aim of improving the country’s industrial capabilities in the next 10 years. Therefore, in the long run, another local challenger is likely to rise in the Vietnamese market.

“Vietnam’s electronics industry is developing, and it certainly needs a leading local mobile phone brand,” said Tran Viet Hai, CEO of Bkav Electronics, the company that produces Bphone, as well as famous anti-virus software.

Nokia and iTel Enters Top Five Rankings in Vietnam within a Year of Launch

Top five smartphones brands account for almost four fifth of the smartphone shipments in 3Q 2017

New Delhi, Mumbai, Hong Kong, Seoul, London, Buenos Aires – December 8th, 2017

According to the latest research from Counterpoint’s Market Monitor service, Vietnam smartphone shipments grew 12% sequentially but remained flat annually in Q3 2017, while the overall handset market (including feature phones) increased by 17% year on year.

Commenting on the findings, Tarun Pathak, Associate Director at Counterpoint Research said, “Vietnam is one of the key markets for handset brands in the South-East Asia region. Over 30 smartphone players are competing in a rapidly changing competitive landscape. The third quarter saw some dramatic shifts and the expansion of new players in the country. Nokia HMD and iTel, which entered Vietnam at the beginning of the year, have quickly escalated to the #2 and #5 positions in the overall handset rankings and #4 and #5 in the smartphone segment respectively. These brands captured share away from local brands in the smartphone segment, whose collective share fell to single digits (8%) for the first time ever.”

Commenting on the price band trends, Shobhit Srivastava, Research Analyst at Counterpoint Research said, “Vietnam’s smartphone market is driven by the fast-growing $100-$150 price segment which is contributing to almost third of the shipments. Apart from this the premium smartphone segment (> $400) continues to do well in Vietnam, mainly driven by Samsung and Apple. The success of the premium segment is due to a growing trend of paying for flagship devices on installment schemes at zero interest. Samsung led the premium segment in Q3 2017 with 43% market share followed closely by Apple with 41% market share.”

Exhibit 1: Vietnam Smartphone Shipments Market Share – Q3 2017

Source: Counterpoint Research: Quarterly Market Monitor Q3 2017

Market Summary:

Vietnam’s Handset Market grew 17%, but the smartphone market remained flat annually indicating growth in feature phones.
Smartphone penetration in terms of shipments reached 51%. Feature phones are still a sizeable market for OEMs to target.
The top five brands accounted for almost four-fifths of smartphone shipments in Q3 2017.
Local players’ smartphone contribution hit an all-time low of 8%.
Samsung continues to lead Vietnam’s smartphone market with a market share of 43%. Vietnam is one of the few countries in the APAC region where Samsung is still enjoying a significant lead over its nearest competitor.
However, in the premium segment Samsung leads by a thin margin over Apple, but Apple is expected to lead premium segment in Q4 2017.
Vietnam is one of the best performing countries in the SEA region for Apple. It is scaling both its offline and online presence in the country where it currently has 15 Apple authorized stores. However, gray market sales of iPhones continue to be a big challenge for the company to tackle.
Samsung & OPPO alone captured 2/3^rd of the Vietnam smartphone market during Q3 2017.
Oppo is the second largest smartphone brand in the country, capturing 22% of the market. Almost 60% of its sales were driven by its bestselling mid segment model A37.
Brands like Vivo are scaling up fast as they increase their portfolio and distribution presence.
The entry of Nokia HMD and iTel among top five players in smartphone segment was one of the key trends during the quarter as they ramp up their presence in the sub $150 segment, which was also the fastest growing segment.
For Nokia HMD, Nokia 3 was its best-selling device while for iTel it was S11 Plus.
Vietnam’s Smartphone market is expected to grow by 10% YoY in CY 2017.

Exhibit 2: Vietnam’s Bestselling Smartphone Model Rankings – Q3 2017

Source: Counterpoint Research: Quarterly Market Monitor Q3 2017

Please feel free to contact us at press@counterpointresearch.com for further questions regarding our in-depth latest research, insights or press enquiries.

Analyst Contacts:

Tarun Pathak
+91 997-121-3665
tarun@counterpointresearch.com

Shobhit Srivastava
+91 900-083-1117
shobhit@counterpointresearch.com

Follow Counterpoint Research
analyst@counterpointresearch.com

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Insights Tag: vietnam smartphone sales

Vietnam Smartphone Shipments Double QoQ in Q4 2021, Up 15% YoY; Samsung Retains Top Spot

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