Smartphone sales in Vietnam have plunged in the first two months of 2023 as tightened spending amid rising inflation prompts the sector’s first decline in years of recent growth.
According to an industry report, less than 2.5 million smartphones were sold in Vietnam this January and February, down 30% year-on-year.
“This year consumers have tightened their spending, even during the Tet holiday, which has been peak shopping season for years,” said Nguyen Lac Huy, a media representative at CellphoneS, referring to the Lunar New Year holiday which fell at the end of January this year.
Industry insiders estimate that sales since the beginning of this year have dropped to levels not seen in at least two or three years. In recent years, growth over the same period has often been within the 5-15% range.
This decline is in line with global trends.
Smartphone sales worldwide in the last quarter of 2022 plunged 18.3% year-on-year, according to the International Data Corporation (IDC).
It was the steepest decline in a quarter since 2013, IDC reported. Total smartphone sales in 2022 dropped by 11.3% from 2021.
In Vietnam, the biggest drops were recorded in the middle and affordable segments. Last year, sales of smartphones under VND5 million dropped 60% from 2021.
“Economic difficulties have had a large impact on the low-income population, including workers,” said Hong Quan, an industry observer.
Tightened credit policies have also prompted some retail chains to cancel their zero-interest installment payment campaigns.
The high-end segment is also struggling. The iPhone 14 Pro Max, one of the most expensive smartphones on the market, has seen prices plunge by 25% to VND27.4 million over the last five months.
Phan Thi Kim Quyen, a media representative of retail chain Minh Tuan Mobile, said that this year Apple lowered its latest smartphone price earlier than in previous years (in which the drop has come as late as June).
Other retail chain representatives have said they are now lowering prices because they misinterpreted market demand trends and imported more than they should have. iPhone prices in Vietnam are now among the lowest in the world.
FPT Shop anticipates that there will be no growth in smartphone and computer sales this year, while other chains expect a recovery in demand by early next year, or the end of this year at the earliest.
CellphoneS is cutting business hours and staff sizes at low-revenue shops. It is also seeking rent discounts from property owners.