Expanding market share
A March 2020 report by the global market research firm GfK shows that Vsmart phones manufactured by VinSmart Research and Manufacture Joint Stock Company (a subsidiary of the conglomerate Vingroup) officially accounted for 16.7 percent of the Vietnamese smartphone market after seven consecutive weeks of growth. Vsmart now ranks only behind Samsung and OPPO in the Vietnamese smartphone market and far ahead of the remaining brands.
The 16.7 percent market share reflects a breakthrough given that as recently as January, Vsmart ranked 6th and 7th in the market.
Vsmart dominates the popular smartphone segment at a price from VND1-3 million. The dominant product in this segment was Vsmart Joy 3 with record sales of 12,000 phones within the first 14 hours of its launch. Products in the under VND1 million and VND2 million segment also dominated the market. By the end of March 2020, VinSmart had launched 12 smartphone models.
The results achieved 15 months after the Vsmart launch are particularly impressive compared with major brands such as Xiaomi and Vivo that have not surpassed the 10 percent market share in Vietnam. An FPT Retail representative assessed that with its growing popularity, Vsmart is raising concerns among competitors, including those with greater market share.
A representative of VinSmart Research and Manufacture JSC said the results suggest that VinSmart is heading in the right direction and its goal is to continue optimizing products with better quality while catching up with new trends with more competitive prices.
Retailers attribute Vsmart’s success in the crowded smartphone market to its attractive designs and good after-sales service, and particularly to its competitive price. In fact, price appears to be the brand’s biggest advantage, which previously belonged to phone manufacturers from China. Retail data show that Vsmart phones are still being discounted, attracting more customers. This has prompted manufacturers in this segment of Xiaomi and Vivo brands to reduce prices by 5-10 percent. The price advantage is said to be the right way to make it easier for consumers to access a new brand like Vsmart, introducing them to the brand and drawing them to upgrade to other Vsmart models.
Vsmart also offers an extended warranty of up to 18 months and 1-for-1 exchange policy within 101 days. Most other firms have a 12-month warranty and a 30-day exchange policy. Vsmart’s strategy has created a change in after-sales service, with Xiaomi and Nokia extending their warranty to 18 months, too.
Industry experts believe Vsmart phones have a way to go in order to reach higher price segments because of the fierce competition. However, Vsmart has gained certain advantages and its further development is just a matter of time. As a Vietnamese brand, it is certain that its influence in the Vietnamese smartphone market will increase in the near future.
GfK data also showed that VinSmart is one of the few mobile phone companies that gained market share despite the Covid-19 epidemic, demonstrating the capability and spirit of Vietnamese businesses in difficult times. Business analysts believe the VinSmart sales surge not only helped retailers maintain revenues during a period of economic downturn and uncertainty, it also provided a morale boost to the business community in general.
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