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Eyes on the smartphone prize

Released at: 14:45, 17/05/2017

Eyes on the smartphone prize

Photo: Viet Tuan

Who, if anyone, is in a position to take over third place in Vietnam's smartphone market from Apple this year?

by Minh Do & Anh Duy

Despite the problems besetting the Galaxy Note 7 and its batteries, Samsung products remain popular in Vietnam, with smartphone sales at impressive levels in 2016. OPPO, meanwhile, has spent the most on marketing and advertising to increase its brand identity among Vietnamese consumers. Aware of the rising consumption in the country, the two have the most number of smartphones being sold in the market. So who will make up the Top 3 in Vietnam’s competitive smartphone market this year?


More than 14 million smartphones were sold in Vietnam last year, according to IDC Vietnam. Samsung led in terms of volume, with a market share of 28 per cent, followed by OPPO with 25 per cent then Apple with 7 per cent. Samsung and OPPO have been locked in competition over recent years to secure even higher market shares. The competition really heated up last September, when Samsung officially launched the Galaxy J7 Prime to compete directly with the OPPO F1s in the mid-end segment of around VND6 million ($265). 

Samsung, OPPO, and Apple are the Top 3 best-selling smartphones at thegioididong and FPT Shop. The Galaxy J7 Prime and OPPO F1s contributed significantly to growth in sales at the two major mobile retailers in 2016. “Vietnamese consumers are persuaded by the trendy functions of the two products, including selfie cameras, fingerprint sensors, fashionable design, and competitive prices,” said Mr. Tran Nguyen Truc, Head of Telecom & Mobility Category at the Mobile World JSC (MWG). 

Smartphone market share in Vietnam, 2016

Source: IDC Vietnam, 2016

The Samsung Galaxy J2 Prime and J5 Prime and the OPPO A39 and A37 also sell well at mobile retailers. The two brands have constantly retained their leading positions in recent years, according to Mr. Vo Le Tam Thanh, an analyst at IDC Vietnam. Asian smartphone manufacturers are quite flexible in meeting demand among young consumers. As low prices make owning a smartphone quite easy, updating drives most purchases. As such, quality functions such as selfie cameras, fingerprint sensors and a good configuration are now more important, though price still plays a role. 

OPPO failed with its Find 7, launched in 2014, as smartphones in the high-end segment of more than VND7 million ($310) were not the choice of the majority of Vietnamese consumers. It then focused on the mid-end segment. Smartphones costing less than VND7 million accounted for 83 per cent of all smartphones sold in 2016, according to figures from GfK, though Vietnamese consumers now spend more on smartphones than previously. “Samsung and Chinese smartphone manufacturers like OPPO, Vivo, and Huawei realized the trend when moving from producing low-cost products to mid-cost ones,” said Mr. Thanh. 

Quality and functions are only one part of success, however, as marketing campaigns are also a decisive factor. Samsung and OPPO have poured a great deal into advertising on TV during prime time. They have also used images of rising Vietnamese stars like Son Tung M-TP, Issac, Noo Phuoc Thinh, and Ho Ngoc Ha in advertising their products. OPPO has sponsored a number of game shows on TV and increased its profile in mobile retail stores and mom & pop stores in rural areas.

In third position in 2016, Apple is a brand that doesn’t need any marketing campaigns in Vietnam. Though being launched in 2013, the iPhone 5s is still is the hottest smartphone on the market, according to Mr. Truc from MWG. 

Smartphone sales in Vietnam, 2016

Source: IDC Vietnam, 2016

Total smartphones in Vietnam, 2015-2017

Source: IDC Vietnam, 2016

Apple is now paying more attention to Vietnam, opening an office in Ho Chi Minh City at the end of 2015. In April, its legal representative in the country, VOTRA, asked mobile stores to cease using the Apple trademark without the company’s permission. The number of iPhones sold unofficially exceeds official sales in Vietnam. “Figures from IDC Vietnam exclude iPhone products sold unofficially,” said Mr. Thanh. “Its market share may be much higher than 7 per cent.” The legal move is to support its authorized stores and protects consumer rights. 

Third up for grabs

The mid-end segment will continue to be the target of most smartphone manufacturers for the time being, with competition heating up as a result. “2017 continues to see competition among the three biggest names - Samsung, OPPO, and Apple,” Mr. Thanh said. “Samsung and OPPO will be Top 2 but they will struggle to retain their positions over the long term because the market is constantly changing.”

Samsung defines developing diverse products in all the segments as a core business strategy. Mr. Nguyen Tri Thong, a spokesperson at Samsung Vina, said that Vietnam holds much potential. “Samsung will constantly innovate its products, improve the quality of its services, and professionalize its marketing and advertising activities,” he said. “We are confident of staying No.1 in all segments.” 

The fight for third place is where the competition is at its most fierce. As Mr. Thanh noted, however, Apple’s recent moves show that it is paying more interest to the country. Apple’s partners in Vietnam are working effectively, it saw positive growth in 2016, and its efforts to strictly manage its trademark in the country prove it has its eye on retaining third place, according to Mr. Thanh. 

Meanwhile, a Chinese smartphone brand, Xiaomi, has joined Vietnam’s smartphone market through Vietnamese technology distributor Digiworld. The brand is not as powerful in China as it was five years ago, when its strategy was to focus on products with cheap prices and strong configuration. While one of the smartphones it has launched in Vietnam, the Redmi Note 4, is in the busiest price segment of VND7 million ($310), the Mi MIX is in the high-end segment, at VND16.9 million ($740). It has ignored the low-cost segment, as it has successfully done in its home market. 

The brand announced it will bring both affordable and premium smartphones to Vietnam and throw out a challenge to Samsung and Apple. “There is an opportunity for Xiaomi to gain third place,” Mr. Thanh agrees. “But it is quite small and Vietnam’s smartphone market is very competitive.” Xiaomi, though, has faith in its products. A representative from the company told a press conference in March that its products will be distributed at 6,000 points of sales around the country. Mr. Truc from MWG said that the response to Xiaomi’s products has been positive thanks to their good design and functions, as well as competitive prices. “It has potential if it commits to long-term investment in Vietnam,” he said.

Nokia has returned to the mobile phone market both in Vietnam and the world, introducing new feature phones and smartphones last year. Its strategy is to develop the Android system, after failing with the Windows Phone system. Reclaiming its former glory will require a lot of effort, Mr. Thanh said, though its name remains well-known in Vietnam and it actually led the feature phone market in 2016. FPT Shop continues to distribute its products, Mr. Nguyen Viet Anh, Deputy CEO of FPT Retail, said. Meanwhile, Mr. Truc said that Nokia’s products need more personalizing and better pricing and marketing, but it could indeed change the mobile phone market. “Nokia securing third place would depend on its new products and human resources in Vietnam,” Mr. Thanh said. 

2016 was a successful year for Huawei, another Chinese brand that is now in third place in the global smartphone market. Like Samsung and OPPO, it poured a lot of money into marketing campaigns last year in Vietnam and has announced it will sooner or later seize third place. “Huawei Vietnam follows the global strategic goals,” said Mr. Nguyen Viet Hoang, Deputy Director of Huawei Consumer Business Group (CBG) in Vietnam. “We pursue a customer-centric strategy by making quality, well-designed products and will continue to expand our distribution channels this year.” The mid- and high-end segments are the focus of the brand in the time to come, and its products will be innovated with new technology and leading technology. 

An estimated 15 million smartphones will be sold in Vietnam this year, according to IDC Vietnam. While the market will indeed see tough competition in mid-end smartphones, as Mr. Truc said, there will also be growth in the near high-end segment, with prices from VND8 million ($350) to VND10 million ($440). High-end design, good cameras and batteries, quick recharging, and greater security are the criteria Vietnamese consumers will base purchasing decisions on this year. Smartphone manufacturers eyeing the Top 3 must invest more in products as well as in marketing and branding, Mr. Thanh believes. 

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