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The Competition on Vietnamese Mobile Devices Market 2012
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The Competition on Vietnamese Mobile Devices Market 2012


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  • 1. The Competition on Vietnamese Mobile DevicesMarket, Reached VND 22 Trillion Worth.Samsung accepts shaking hands with PSD, a power distributors to quickly overtaken from thehands of a Nokia with two clear objectives: Putting on a limit factor for Nokia and seizingentirely PSD‘s distribution channel distributors...; - PSD own up to 1700 agents and 11 branches and FPT Distribution Company has 1,000 agents in nationwide. - Samsung has a direct distribution system to major supermarkets in the city and provincial distributors in the region. Meanwhile, Nokia will only corporate with the big distributors. - After the break with PSD, Nokia will work with FPT and Lucky. - Large waves from the change in the relationship of Nokia - PSD - Samsung will entail small waves merging from the likes of HTC, Sony, thegioididong, FPT, Vien Thong A … - Brightstar and BrightPoint jump into battle of distribution, that makes distribution of the mobile market in Vietnam has many major changes. - The rumor that FPT Telecom will have a plan to acquire VienThong A to confront with thegioididong.The competitive pressures in the mobile market (VND 22 trillion) forced both distributors andmanufacturers are always looking for the key to breaking this dependency. Thus, whether thelinkage is tight, it can also be easily broken. 1
  • 2. Samsung - Nokia in comparisonAccording to IDC, from quarter I/2012, Samsung has achieved significant progress on the worldmarket as shipped 93.8 million of mobile phones, overtaking Nokia to become the leadinghandset manufacturers the global market. However, in Vietnam, despite the advantages offactory, Samsung is always considered behind Nokia.Nokia ended the first quarter 2012 (quarter I/2012) as a leading provider of cell phone providers,representing more than half of mobile phones in Vietnam. Mr. Nguyen Van Dao, deputy general manager of Samsung Vina.Although, Samsung is the leading firms in the smartphone market in Vietnam, due to goodbusiness results of low price smartphones including Galaxy Y and Galaxy Mini, but the totalamount of mobile phone distribution, including popular device and smartphone, still keepingtheir distance compared to Nokia’ s success.Mr. Nguyen Van Dao, deputy general manager of Samsung Vina said: There will be some majorchanges.Samsung start back to cooperating with previous distributors is not a return to the old way, whichis expanding their new distribution channels. Because distributors are now also has taken steps toa new development and stronger than ever.After partnered with PSD, the Samsungs distribution system will change greatly in near future.Under the agreement, PSD as a strategic partner of Samsung will be distributed mobile phone innationwide, the Samsung just keep the direct sales in supermarkets only. 2
  • 3. Therefore, in the coming time, Samsung will be reorganized so that their sale agent on areas willwork smoothly with the new working frame.In general trend, comparison of the correlation of forces, Samsung clearly has advantages interms of technology, design and price, and the leading position of mobile device distributor inthe Vietnam market is not out of reach."However, Vietnam is a special market, user experience brand through the effect of emotional,psychological and the pioneering brand is welcome and acceptable by very large Vietnameseconsumers of. When the Vietnamese people have demand of motorbike, they think Honda firstand of mobile phone, they will find and buy the Nokia brand. So while there are manydisadvantages, Nokia remains the brand value influence in Vietnam, " Mai Trieu Nguyen,Director Nguyen Mai Co., Ltd., said.Because of these, Nokia cannot succeed in other markets but still welcome in Vietnam.According to Nguyen, the most specific evidence that even unsuccessful Symbian operatingsystem for smartphones, but the quick transition to the low end, dual sim, Nokia has been beatthe Chinese phones and Vietnamese brand phone, outsourcing in China has the advantage ofcheap price, last two years.PSD: The right to determine the destiny of 1,700 agents The handshake between Samsung and PSD shocking the mobile phone distributing market. 3
  • 4. Although, there is almost full participation of the well-known brand phone manufacturing in themarket in Vietnam, from the story of two big competition of Nokia and Samsung, could easilysee underground power behind; The impact of the distributor. It is also the cause of the trianglerelationship between Nokia, PSD and Samsung.Different from other consumer products, mobile phones, this sector has annual sales of more thanVND 22 trillion and is likely a fast consuming item due to the enthusiastic participation of theprofessional distribution companies such as PSD, FPT Lucky in domestic and foreign companiessuch as Brightstar Vietnam.Meanwhile, the PSD is a prominent and owning up to 1700 agents and 11 branches innationwide. This is strongest distributor, who possesses a firm financial resources and goodwarehouse system.The follower, could be the FPT Distribution Company with nearly 1,000agents nationwide.Keeping the PSD’s revenue reached 5353 billion during the first 6 months of 2012, besides widedistribution system must also have economic strength for the financial services, creating the bestconditions for small businesses customers can get the goods. Because of this support that thrivesale volume of the PSD distribution in the provincial market. Mr. Huynh Van Thi, PSD’sChairman said.Differently from the way Nokia working with traditional distributors such as PSD, FPT, Lucky ...Samsung has reformed the delivery system for about 2 years ago. Rather than using throughdistributors, Samsung directly distribute mobile phone from Bac Ninh plant poured into largesupermarkets such as Nguyen Kim, TheGioiDiDong, Vien Thong A, Mai Nguyen ... to reach theend- customers. The Samsung factory in Bac Ninh provice. 4
  • 5. With the provincial market, Samsung works with regional distributors, from this point to putproducts with small sales shop in the province. With a direct way, this fast, plus improvements inproduction technology ... 14% market share in 2011, Samsung has been developed very fastspeed, up to No. 2 in the market. However, all is not enough to pass through the way of thedistribution companies doing.According to Mr. Cho Seok Hee, CEO of Samsung Vina Electronics Co.,mobile phone industryrecently has too many changes, and Samsung wants to achieve its leading position in theVietnam market and strengthen its position in international markets and the first change inVietnam is hands with power distributors such as PSD.In 2011, PSD distributed more than 5.9 million Nokia phones, sales of 5200 billion and 134billion of profit, up nearly 50% of total sales of PET. Nokia said after stopping cooperation withthe PSD will expand market share for the FPT and Lucky, in which FPT took the Northward andLucky took the Southward.”The agreed goal of the PSD distribution model with the Samsung isputting products to the best market, limiting the middle and directly reaching end-customersrather than through agents," Mr.Thi disclosed.Mobile phone distribution market becoming increasingly competitive, demanding moreprofessionalism of both distributors and manufacturers in an effort to find out how iscounterweight to reach the independence. The manufacturer will gradually take the initiative,expanding network of partners covering the market and avoid the pressure of distributors. Thedirect selling company under the agreement depending on the strength of each partner rather thanjust associated with major distributors. 5
  • 6. The distributing channel, a big problem for manufacturer. (Exhibition)Partner with the PSD, the empowerment of "Big" distributors on the national market, Samsunghas also set specific targets for this distributor. "With its network, we are confident will helpSamsung achieved the No. 1 position in the Vietnam market, as was done previously withNokia," Mr. Thi confirmed.However, the way of the PSD is not necessarily all roses. The fact that, on market, the regionaldistributor of Samsung is currently unable to hold a larges amount of phone into theirstorehouses than ever before.Samsung must to find the distributors with stronge financial resources such as PSD. PSD is alsodifficult to have any safe option than Samsung while Nokia is going down.How many unknowns are there?Big waves from the change in the connection of Nokia - PSD - Samsung will entail smallwaves coming from as HTC, Sony, Mobile World, FPT, Vienthong A... 6
  • 7. Redrawing the mapThe map of mobile phone distributor in Vietnam not only the major brands. Entangled incommitments not distributed with the same products with Nokia, starting from 2011, PSD hadestablished a distribution company as Smartcom to delivering goods to end-consumer.With systems over 120 nationwide agents, including name of very best sellers well asThegioididong, Vien Thong A, Nguyen Kim, Pico, Smartcom enough to satisfy brands like LG,Sony, Huawei ... Not only that, the phone distribution market even more robust as two majorinternational distributors is Brightstar and BrightPoint, this appearance lead to major changes.The first sign is the last week of 6/2012, XPERIA - Sony Smartphone officially joined VietnamSony Electronics. In principle, the distribution of the Sony phone remains with the Smartcom,nothing changes.According to General Director of Sony Electronics Vietnam, Mr. Yuzo Otsuki, this event marksa consolidation of Sony Vietnam in the market. Since then, the warranty and after sales servicenetwork, customer care for Sony Smartphone products will be expanded..However, according to the the experts, the current distribution network of 160 partner, Sonyshowrooms across the country, including partners of Smartcom, the Sony is restructuringdistribution systems , Smartcom will losing market share also takes place soon.In the trend of restructuring the distribution system in the near future, HTC is also planning anew path for themselves. Mr. Nguyen Hong Chau, chief of HTC representative in Vietnam, said:"We will continue to work with FPT and other partners in creating more effective distributionstrategies." 7
  • 8. Although not revealing new partners, BrightPoint are successful in the world market, the HTCand BrightPoint expand cooperation within Vietnam market is understandable. Mr. Nguyen Hong Chau - HTC Representative in VietnamSmall cake, big mouthIn another aspect, "unknown" named Brightstar can also cause changes in Vietnam market.Recently, the distributor has the right to distribute the iPhone, opening the way for the Applephone into Vietnam, not through Telco distribution network.Initially, Brightstar is only right to distribute the iPhone 3G but the iPhones attraction forenough promising to Brightstar shining in the future.Explaining the cause of restructuring the distribution for new map maker, Mr. Mai Trieu Nguyensaid, the decline of the economy and the number of users has created pressure for the all to find astrategy to keep his new in a changeable market. 8
  • 9. Mai Trieu Nguyen, Director of Mai Nguyen Mobile Technology Co., Ltd.In the same view, Nguyen Van Dao, General Deputy of Samsung Vina, said: "During the currentchanges constantly, distribution policy to develop need a continuous improvement, if not theywill lost his position" .According to the Mobile Phone Tracker quarterly report of IDC Asia / Pacific, the shippednumber of mobile phone consumption in Vietnam recently has fallen about 15%.Mr.Vo Thanh Le Tam, the expert of end-user devices market analysis in IDC research group inVietnam, said: "Some local and China firms have withdrawn from the market, and will leavetheir presence from the market in 2012 because they must try to recovering investment in currentconditions ".There are many involved vendors in the market, the pieces of phone distribution market gettingto smaller and the competition is increasingly fierce. Is the reset distribution maps could hardassist to manufacturers finding the pedal to burst out and conquer new position or not, the finalanswer will be given in the near future.The FPT’s acquisition 9
  • 10. If the struggle for a final right to distributing product heated, the battle of the retail market is noless fierce at all. The information of FPT acquisition of local distributor that is tingles for allweek. Although, there are no official figures, but according to a confident source, that thenumber of shares the local distributor sold to FPT up to 50%. Under the agreement, more than 30%of VienthongA was sold to DT Mobile in early 2012, the number of shares owned by VienthongA is very little.Founded in 1997, so far Vienthong A has developed a distribution network of more than 70 pointof sale on supermarkets and Service Centers around the country. In the announced partner eventof DT Mobile, Ms. Hoang Ngoc Vy, General Director for VienThong A confirmed that with theinherent potential coupled with support from DT Mobile, and a group from Japan, Locals willdevelopment and reached the number of more than 100 of retail outlets in 2012. Late moving in the retail industry for 10 years, was founded from August 2007, after more thanfour years of operation, the FPT retail shop system now up to 24. However, with financialadvantages, FPT also strongly encourages the goal is to figure out between now and 2014, FPTwill co100 and retail shop is at that time to press forward faster FPT to this goal. Specifically, inJuly, FPT System Shop will open three big stores around the country.Thus, the combination of two major distribution systems will support FPT Shop and VienThongA will assist FPT Shop, owning a large distribution system of more than scheduled 100 headstores in 2014. According to industrial insiders, FPT is focusing on development of becoming acounterweight to the Thegioididong, that the brand, FPT has spend a huge effort to buy backduring the time but no any agreement is reached out. To date, Thegioididong has become alargest retail chain of mobile phone with over 220 stores, appearing in all provinces throughoutthe country. Brian-HN (Source: Discussion in CNTT started by khanhproa2, Thursday, 2012 at 5:27 AM) 10