Vietnamese conglomerate challenges Chinese brands in smartphone market

19, Dec. 2018

HO CHI MINH CITY, Vietnam, Dec. 19 NNA   Tran Minh Chung, CEO of Vinsmart, unveils Vsmart brand smartphones at a launch event on Dec. 14, 2018.
HO CHI MINH CITY, Vietnam, Dec. 19 NNA Tran Minh Chung, CEO of Vinsmart, unveils Vsmart brand smartphones at a launch event on Dec. 14, 2018.

HO CHI MINH CITY, NNA - Vietnam’s property-to-retail conglomerate Vingroup has entered the highly competitive local smartphone market, launching low- and middle- priced models to go head-to-head against Chinese rivals.

Its smartphone-manufacturing subsidiary, Vinsmart, on Friday released four Vsmart models developed in partnership with BQ, a Spanish technology firm, for prices ranging from 2.49 million dong to 6.29 million dong ($107 to $271).

In the domestic smartphone market, Chinese brands had the largest combined share of around 39 percent on a shipment basis in the April-June quarter this year. China’s Oppo had 22 percent , while Xiaomi and Huawei accounted for 5 percent each. South Korea’s Samsung had a dominant 37 percent share for a single company, but its phones tend to be pricier.

Xiaomi and Huawei are rapidly gaining ground, boosting their shipments by 3.6 times and 1.9 times respectively year-on-year in the same period, according to Counterpoint Technology Market Research.

The four Vsmart models are the low-priced Joy 1 and Joy 1+, as well as the mid-priced Active 1 and Active 1+. Loaded with chips from Qualcomm Inc. of the U.S., all except the Joy 1 are equipped with a dual camera.

“Active would be a suitable option for young businessmen, while Joy could be a back-up phone,” Tran Minh Chung, CEO of Vinsmart, said at the launch event.

The company sells smartphones both online and at about 4,500 retail outlets across the Southeast Asian country, including VinPro, the group’s electronics store chain.

Vinsmart’s production plant in the northern port city of Hai Phong has an annual capacity of five million units, enough to provide one phone each for more than 5 percent of the country’s population.

Next year, it plans to introduce more than 10 models, including premium and super low-priced items, Chung said.

”Oppo succeeded thanks to large-scale mass advertisements, and Vingroup also has mass advertising with a large budget,” Kengo Kurokawa, president of Asia Plus Inc., a market research firm, told NNA. The newcomer has the potential to “integrate distribution networks and price strategy to gain a certain share,” he added.

Vinsmart plans to sell Vsmart handsets in about 400 BQ stores overseas while setting up six sales divisions for e-commerce and sales in Africa, America, Asia, Europe and Oceania.

Vinsmart plans to manufacture high-end hi-tech electronic products. “Vinsmart will produce smart homes, smart TVs, (and) IoT applications,” said Nguyen Viet Quang, vice chairman of the group.