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The difficulties of the technology retail market began in the second half of 2022, and the “price war” among technology retailers started in Q4/2022.
The reason behind it is after the hot growth phase due to the impact of the COVID-19 pandemic which led to a decrease in demand for technology devices that support studying and working from home, weakening purchasing power, and high inventory due to business plans based on the expectation of continuous growth in 2022. Some large retail systems are struggling.
Retail systems are reducing prices to find customers
In Q1/2023, the revenue of the largest retailer decreased by 25.7% compared to the same period, and post-tax profit only reached 21.28 billion VND, a 98.5% decrease compared to the same period in 2022, a record low level since being listed.
In Q2/2023, it is the most difficult quarter for the technology retail industry for many years, even worse during the COVID-19 period.
Major retailers are involved in the most intense price war in history. Technology companies, distributors are also involved in the “big fight”. Even the iPhone market, which has never reduced prices, is affected, causing retailers to have negative capital, and incur losses.
In Q3/2023, the price war shows no signs of stopping. Not only that, retailers have started to tighten operating costs to minimize losses, such as firing employees, closing many inefficient stores.
Leading retailers have closed hundreds of stores, thousands of employees have been laid off, and it is expected that more stores will be closed in the near future.
End-of-year purchasing power is increasing but still slow
Mr. Nguyen The Kha, Commercial Director of FPT Shop, commented that 2023 is a difficult year for retail businesses, especially mobile retail. The demand for technology shopping is greatly affected by people tightening their spending due to the impact on income sources.
In the days leading up to Tet 2024, the purchasing power of smartphones increased quite well, and retailers expect this year to be prosperous. However, Mr. Nguyen Lac Huy, a representative of CellphoneS, predicts that the market will continue to face difficulties in 2024 because this is not an essential industry.
According to Mr. Kha, for the market to thrive, products need to be equipped with revolutionary technology to create motivation for upgrades with users this year. When all companies participate in this market, the market can have a chance to flourish again.
According to Ms. Phung Phuong, a representative of Di Dong Viet, to anticipate the shopping demand during difficult times, Di Dong Viet has integrated many optimal and cost-saving shopping methods, such as trade-in, upgrading without extra payment, 4 zero-interest installments (no down payment, no interest, no conversion fee, no waiting…), to stimulate consumer demand.
