Boston, MA -- (ReleaseWire) -- 05/23/2014 -- Vietnam's consumer electronics market has a bright outlook as rising incomes and falling average device prices in key device categories catalyse strong growth in spending. We estimate spending grew by 22.4% in US dollar terms in 2013 to US$4.5bn - and we have a positive outlook for the medium term. The country's vast, underpenetrated rural market offers the greatest growth potential, while Hanoi and Ho Chi Minh City accounted for most sales in 2013. Growth areas include smartphones, particularly low-cost devices from Chinese and local brands, and LED TV sets. Vietnam is also rapidly becoming a key destination in global consumer electronics supply chains, with large investments announced by Samsung Electronics, Nokia and LG Electronics in 2013.
Headline Expenditure Projections
- Computer Hardware Sales: US$1.5bn in 2013 to US$1.7bn in 2014, +13.8% in US dollar terms. The low penetration of PCs means vendors can still tap the first-time buyer market, with low-cost tablets from Chinese OEMs proving especially popular with consumers.
- AV Sales: US$1.0bn in 2013 to US$1.2bn in 2014, +10.6% in US dollar terms. Rising incomes and state subsidies for digital migration are driving strong growth in the TV market, with LED and smart TVs proving especially popular.
- Handset Sales: US$2.0bn in 2013 to US$2.1bn in 2014, +6.2% in US dollar terms. After booming smartphone volumes saw value growth of 32% in 2013, we expect a gradual deceleration in value growth due to diminished first-time buyer opportunities.
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Key Trends And Developments
The smartphone market was the most dynamic segment of the consumer electronics market in Vietnam in 2013 as rapidly declining prices catalysed a boom in smartphone volume sales. The key area of growth was the low-end of the market, with VND1.5-3.5mn smartphones accounting for around 60% of smartphone sales, but only 20% of the value of the market. The growth in smartphone sales has been fuelled by the popularity of Android-based models, with Samsung Electronics and LG faring well, along with local brands such as Q-Mobile. Although Nokia's Lumia 520 is a notable success from the Windows ecosystem, Android is expected to remain the dominant ecosystem. However, all vendors will have to contend with a slowdown in smartphone growth from 2014 due to diminished first-time buyer opportunities and margin maintenance prohibiting another round of heavy discounting by vendors.
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