In Vietnam, giant home appliance chains elbow out small traders

By Ngoc Tuyen   September 5, 2017 | 07:00 pm GMT+7
In Vietnam, giant home appliance chains elbow out small traders
Dien May Xanh is one of the biggest appliance store chains in Vietnam. Photo by VnExpress/Anh Tu

'If you only have one store, how can you compete with a bigger firm with several stores in the same area?'

Large home appliance retailers are expanding rapidly in Vietnam, pushing small traders to the verge of disappearing.

Dien May Xanh, the home appliance arm of Vietnam's largest mobile retailer Mobile World JSC (MWG), has expanded its business throughout the country to 473 stores, and recently purchased Hanoi-based chain Tran Anh Digital World in order to penetrate the northern market more easily.

Media Mart is also becoming a major player, and has opened 43 stores in the north since it entered the market in 2013.

In Hanoi alone, Media Mart has trebled its number of stores to 18 over the past five years, and is planning to open six more.

As a newcomer to the appliance sector, Vingroup's VinPro chain is also gaining in reputation.

In a report released last year, MB Securities (MBS) said small traders currently account for nearly half of the home appliance market with around 7,000 small stores across the country.

But with the expansion of big companies that offer various products and good customer services, MBS said small traders are likely to disappear.

Van, the owner of a store in Hanoi, said customers from all over the city used to visit her store 10 years ago, but business has been slow for the past five years.

“There were not that many big appliance stores and shopping malls in this area 10 years ago, and I didn't have to compete with them in terms of price and promotions,” she said.

The dog-eat-dog competition has already forced many small firms to shut down. Among them are Viet Long and Topcare in Hanoi, and HomeOne and Best Carings in HCMC.

“Big companies keep opening new stores, so small traders will be forced out of the market if they sit still and do nothing,” said Le Quang Vu, CEO of Media Mart.

“A store could sell its products over a radius of 30-40 kilometers in the past, but these days that has dropped to only 5-10 km as there are too many stores. If you only have one store, how can you compete with a bigger firm with several stores in the same area?” he said.

 
 
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