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Vietnamese electronics retailers rush to expand distribution networks

Vietnamese electronics retailers rush to expand distribution networks

Thursday, May 20, 2021, 11:23 GMT+7
Vietnamese electronics retailers rush to expand distribution networks
Customers crowd an electronics retail store in Vietnam. Photo: Duc Thien / Tuoi Tre

Electronics store chains in Vietnam are scrambling to expand their distribution networks to quickly raise market share.

Since the beginning of this year, the bricks-and-mortar store system of Vietnamese mobile retailer Di Dong Viet has grown to 18 independent outlets and 11 shops-in-shop, which are placed at the offices of local mobile network operator MobiFone.

Di Dong Viet plans to open a new store in Bien Hoa City, located in southern Dong Nai Province, in the near future, according to its CEO Nguyen Ngoc Dat.

ShopDunk, the distributor of Apple products and a competitor of Di Dong Viet, has increased its store number from 12 in Hanoi, Ho Chi Minh City, and seven other localities at the end of 2020 to 19 currently.

“In the second quarter, we will expand more in Hanoi and Ho Chi Minh City,” ShopDunk’s CEO Doan Viet Dung said.

The expansion is to meet the growing demand for mobile devices, possibly for remote work and communication amid the ongoing COVID-19 pandemic, Dung added.

Not only renowned retailers but retail startups are also beefing up their operations.

Following the inauguration of its maiden store in Ho Chi Minh City in January, ThinkPro, a laptop retail and experience brand that was first introduced in 2016, is planning to open two new outlets in Hanoi and one in Ho Chi Minh City.

According to Nguyen Thi Anh Hong, marketing director of mobile device retailer 24hStore, the physical coverage helps retailers gain customers’ trust and preference.

“The technology industry has seen tough competition, especially in the repair and customer service segments,” Hong said.

“As price differences among retailers are really insignificant, customers are willing to buy from the brands they trust.”

Meanwhile, big players have come up with different approaches to gain more market share.

On May 13, The Gioi Di Dong (Mobile World), the leading electronics store chain operator in Vietnam, launched a scheme to pay small mobile and electronics shops five to 20 percent in commission for each The Gioi Di Dong product sold.

The Gioi Di Dong incurs all transportation, delivery, and warehouse costs.

“There are currently about 30,000 small mobile retail stores nationwide and we want to cooperate with them to expand our distribution network across the country,” said The Gioi Di Dong’s CEO Doan Van Hieu Em.

“Partner stores will represent us in remote and rural areas.”

Currently, The Gioi Di Dong is operating a network of more than 2,500 outlets in Vietnam and holding about 50 percent of the local market.

Other large chains account for about 30 percent and the remaining 20 percent is shared among small retail stores.

Through the commission scheme, The Gioi Di Dong aims to partner with small retailers, thus further expanding its market share.

At the end of April, FPT Shop, the retail chain of Vietnamese technology firm FPT, announced the inauguration of 70 laptop retail centers nationwide, which are specialized in selling laptops and related accessories.

According to German market research institute GfK’s data, laptop sales at FPT Shop’s 630 stores has doubled compared with both the firm’s plan in the first quarter of 2021 and the overall market.

“With a breakthrough growth rate of 60 percent in 2020, laptops are a major contributor to FPT Shop’s revenue and gross profit,” said Nguyen The Kha, senior director of mobility groups at FPT Shop.

Some industry insiders have forecast great hardship faced by small businesses in the current context.

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