Tech goods distributors fight over mobile phone market
VietNamNet Bridge - The competition among technology goods distributors has become cutthroat in the lucrative mobile phone market segment, which makes up 40 percent of the technology goods market worth $7 billion. 

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Dau Thau cited a report of the HCMC Stock Exchange (HOSE) as showing that the Q3 price index of technology goods increased by 18 percent over the quarter before and by 19.84 percent over the same period last year.

In 2015, the tech goods market value reached VND154.7 trillion, a growth rate of 22.6 percent over 2014, of which the mobile phone segment saw the highest growth rate at 30 percent. 

It made up 42.4 percent of market value, while electronics and refrigeration engineering made up 42.7 percent; computers 12.9 percent; and cameras 2 percent. 

Dang Tran Hai Dang, deputy director of VietinBank Securities, said that the tech goods distribution market was witnessing stiff competition among distributors and competition between distributors and retailers. 

Dang said the tech goods distribution value chain has five elements – logistics, sales, post-sales, marketing and market analysis. Domestic distributors do well with sales and logistics, which bring the lowest profits.

The business risk for tech goods distributors is that sales depend on large manufacturers or retailers. Digiworld, for example, saw profits fall because of the decrease in Nokia product sales when the company stopped manufacturing.

For tech goods retailers, the risk is the high rent for retail premises. While there are up to 10,000 retail points throughout Vietnam, the services provided by retailers are nearly the same.

The competition among technology goods distributors has become cutthroat in the lucrative mobile phone market segment, which makes up 40 percent of the technology goods market worth $7 billion. 
As for manufacturers, Tran Vu, CEO of Dell Vietnam, said selling goods via distributors is Dell’s policy, because Dell targets both individual and institutional clients.

If retailers receive goods directly from manufacturers, they face high risks, including price fluctuations, changes in technology and consumers’ tastes, because the time needed to receive goods from manufacturers is longer than that from distributors.

Bizlive quoted Huynh Phuoc Cuong, an expert in the tech goods market, as saying that competition in the mobile phone market segment was between Vien Thong A, FPT and MWG. 

The distributors such as DGW and PSD have been competing to become leaders in the market.

Some retailers such as MWG and FPT now import products themselves and sell directly to consumers. Is there competition between retailers and distributors?

Among distributors, DGW holds 8 percent of the mobile phone market share and 30 percent of laptop market share with 6,000 sale agents. Meanwhile, PSD has 2,100 sales agents and FPT 1,500.

Among retailers, MWG holds 30 percent with 640 shops, while FPT Shop has 10 percent with 300 shops.

Mai Chi
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