Forbes: Why does Vietnam keep trying to make smartphones but cannot sell?


From an expert's perspective, what are the obstacles 'Make in Vietnam' smartphone is facing on the road to success?

Vietnam's self-development of smartphones is probably a smart economic direction. The country has made great strides in manufacturing and assembling electronic devices over the past 30 years. Samsung Electronics has also invested US $ 17.3 billion here to build their own factories. The school always puts science and electronics subjects first, students who have graduated and have experience working in big companies certainly know how to make a complete smartphone.
Vietnamese companies have also made a number of smartphones, usually cheap Android models. The QPhone and BPhone were among the first products to be commercialized. And now Vsmart - a sub-brand of Vingroup is also selling some smartphones for only $ 100.

The biggest problem is: Vietnamese people do not buy products made by their own country, because they can buy products from bigger names with the same amount of money.
Mr. Maxfield Brown from consulting firm Dezan Shira & Associates in Ho Chi Minh said that Vietnamese people 'prefer' products from big brands. "Vietnamese consumers like to choose international electronic products, and I think this trend will continue when the spending level is increasing."

Mobile World - the store chain of investment company Mobile World. When Mobile World president Nguyen Duc Tai announced he was going to 'carry out a smartphone revolution in Vietnam', many people didn't believe it - but he did it when Mobile World was now a big seller. The most smartphone in Vietnam.

A brief history of smartphones that are 'Vietnamese-branded'
Bkav Corp is the earliest Vietnamese smartphone developer, since 2017. The first BPhone and the successor to BPhone 2 have all received negative reviews from users. In total, these two devices sold only 12,000 units. Its CEO, Mr. Nguyen Tu Quang, acknowledged the failure, but remained optimistic and said that it would become "Apple or Samsung of Vietnam in the future". The BPhone 3 (priced at $ 314) that was launched last year seems to be 'quite good' when praised for its processing speed and good water resistance.

However, when entering the major smartphone stores in Ho Chi Minh, we still do not see where the BPhone is. Many shoppers who even want to buy don't even know where to order. Companies like Masstel and Mobiistar have also launched a few of their own, but they haven't gotten anywhere near names like OPPO, Samsung and Sony.

Vietnam's homegrown smartphones only accounted for 1% market share in the last quarter, according to IDC, which is very small compared to Samsung (42.8%), OPPO (23.2%) and Xiaomi (6.5%). . Vsmart - a subsidiary brand of Vingroup has the ambition to change this situation. Since 2017, the company has sold 300,000 smartphones in 5200 stores. Its factory can produce 25 million units a year, and is planning to expand to reach 100 million units.
Vsmart signed a contract with the Spanish firm BQ to sell four smartphones in December. According to a representative of Vsmart, quality is the most important thing in its products. "Vsmart will develop in the direction of 'divide and conquer,' launch more high-quality products than competitors in different segments."

Vingroup - Group of chairman Pham Nhat Vuong has revenue of up to 5.26 billion USD in 2018, with a profit of 6.2 trillion VND. According to Mike Lynch of SSI, Vingroup is an interesting group. "If they want to enter any market, they will do it." He described the company's products as having similar designs to Meizu's smartphones, and was not afraid to buy them.

Vietnamese users still prefer foreign products
Many experts compare Vietnam's 'foreign exchange' trend with a similar trend that took place in China about 20 years ago, when people's incomes increased. In China, this trend has changed as the country has started to pick domestic goods, once it has made sure that what it buys is as good as foreign products. Huawei, OPPO and Xiaomi smartphones are very expensive in this market.
Mr Brown said: "I can also see this happening in Vietnam, in the future maybe many people will start buying 'Make in Vietnam' to show patriotism."

The Galaxy S7 Edge billboard in Vietnam, just outside the Samsung Bac Ninh factory. Samsung has built a 'industrial park' with 45,000 employees, many of its factories in a single location similar to what they did in Korea. Thanks to these factories, Bac Ninh has grown very fast, with 2000 stores and hotels newly opened in the period of 2011-2015, raising the region's GDP 3 times higher than the national average.
Domestic carriers are also now focusing heavily on the low-end smartphone market - attracting people with low incomes. "Consumers are more concerned with the quality and price of their smartphones than their origins, and the things they care about most are the battery, camera, screen and operating system."

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