Despite the unexpected impact of COVID-19, consumer electronics in Vietnam is predicted to recover quickly from store closures, lower growth in disposable income, and other adverse market factors, and post steady volume growth in 2021 in comparison with the current year. The market remains positive in some categories and business niches, especially in the mass segment.
During the pandemic, Vietnamese people followed the government’s direction quickly by staying at home and working from home as much as possible. This home seclusion drove significantly increasing demand for laptops, tablets, and other IT accessories to aid the working and studying process.
Vietnam proved to be one of the first Asian countries to successfully contain the spread of COVID-19, with it seeing very few cases in the early stages of the pandemic. Social isolation guidelines were introduced during 1-22 April 2020.
In 2020, competition within consumer electronics intensified considerably. VienthongA and VinPro officially closed their doors permanently while Dienmayxanh celebrated opening its 1,000 stores in Vietnam.
The profile of e-commerce has been rising significantly among consumers in Vietnam. Consumer electronics is the largest product category in e-commerce (apart from “other”), supported by the fact that the young tech-savvy consumers who are the most prominent online shoppers are also the most interested in new consumer electronics products. Indeed, younger consumers often see personal electronics such as smartphones and smartwatches as a way to express social status.
The Vietnamese Government is making efforts to facilitate the development of e-commerce by strengthening legislation relating to internet security Cash on delivery (COD) remains one of the most common payment methods for online businesses in Vietnam. COD allows consumers to shop online to inspect products before making payment.
E-commerce continued to grow strongly in Vietnam in 2020. The channel benefited from the rising demand for convenience amongst busy young urban consumers, rising smartphone ownership, and the development of electronic payment options, as well as the ongoing expansion and diversification of the product offering beyond the core categories.
In the retail sector, the highly rural character of the Vietnamese population helps to maintain the strong role of traditional independent retailers and presents considerable challenges for chained players in terms of reaching consumers. Nonetheless, with ongoing urbanization and changing consumer lifestyles, chained retailers are making a growing impact across a number of retailing channels, including electronics and appliance specialist retailers.
Ongoing urbanization is set to play an important role in driving growth in the Vietnamese retailing market over 2020-2024, as it brings more consumers into contact with modern retailing formats, undermines traditional behaviors, and creates busy lifestyles that magnify the value of convenience. Moreover, rising consumer purchasing power is set to diversify the character of demand, as well as driving an upmarket trend across many product categories.