Mr. Doan Van Hieu Em, a member of the Board of Directors of thegioididong Joint Stock Company, who is in charge of the two chains thegioididong and Dien May Xanh said that the current purchasing power of the electronics and home appliance industry has not changed much. The company’s orientation for 2024 is to adapt to the new situation where consumption is stagnant or even declining, and to be ready to cope with market fluctuations.
Low purchasing power
According to Mr. Hieu Em, in the next 2-3 years, thegioididong and Dien May Xanh do not plan to expand their stores, and even the existing stores that are not operating effectively will have to be adjusted and closed.
Electronic stores are increasingly deserted
Mr. Hoang Trung Kien, General Director of FPT Digital Retail Joint Stock Company (FPT Shop retail chain specializing in technology, electronics, refrigeration, and home appliances) said that in 2024, the market situation is expected to remain challenging because of the difficult economic situation, which is a factor leading to consumers continuing to tighten their spending, especially on non-essential items.
Mr. Kien said that in 2023, due to difficulties, FPT Shop had to close 30 stores because of ineffective operations. In 2024, the company will review and evaluate the operations of each store and then close some ineffective stores to focus on improving the business performance of existing stores.
The owner of thegioididong – Nguyen Duc Tai confirmed: “The two chains thegioididong and Dien May Xanh have just gone through a major change from allowing competitors and others to take advantage of huge price differences and make a profit with customers, so they had to compete on price and reduce prices to regain market share, and they have succeeded. This year, thegioididong and Dien May Xanh will be the pillars of profit contribution for the group.” Mr. Tai also said that the price war this year will not be as fierce as last year.
Other retail systems such as Cho Lon Electronics Supermarket, Nguyen Kim, Thien Hoa, CellphoneS, and Di Dong Viet said that sales in the past year were not promising. Therefore, they must strive to gain market share with the best possible price and superior after-sales service. Ms. Kim Van, Marketing Director of Di Dong Viet system, said that in addition to competing on price, the system also competes with superior value. Cho Lon Electronics Supermarket focuses on low-price solutions and claims that they will double refund if anywhere is cheaper.
Exploiting the online market
Direct sales have been fiercely competitive among retail chains in the past, and now only the online sales channel has not been invested in a systematic way. As a result, retail systems are determined to invest heavily in the online sales channel to consolidate market share and create a competitive advantage.
According to Mr. Doan Van Hieu Em, although the market is not promising this year, thegioididong and Dien May Xanh have regained market share, capturing from 50% to 70%, depending on the product category. With the remaining market share, thegioididong and Dien May Xanh cannot open stores to compete but must switch to the solution of promoting online sales to find customers. “There are still many opportunities. The remaining market share is large enough for the company to focus on investing in goods, sales activities, delivery and installation, promotions, and financial solutions to make it easier for customers to buy, thereby increasing revenue and market share,” said Mr. Hieu Em.
Mr. Hoang Trung Kien believes that the shift to online is a general trend and has a high conversion rate. Therefore, FPT Shop focuses on and invests heavily in multi-platform online business, exploiting and applying technology to understand and approach customers in the most flexible and effective way and sets a growth target of about 30% in online business. FPT Shop continues to supplement and focus on developing popular items such as electronics, refrigeration, and home appliances to exploit and maximize the potential of each store.
Mr. Kien also acknowledged that the market will continue to be volatile this year. Therefore, the business situation continues to fluctuate depending on market developments and specific time periods. For example, from the second quarter, it is the low season, which will reduce purchasing power. From September to October, it will be more positive because the market will have new product lines launched.
To compete, the FPT Shop chain will implement a series of synchronous solutions to optimize operating costs and improve the system, supplement and diversify product groups such as electronics, refrigeration, and home appliances to exploit and maximize the potential of each store, and invest heavily in multi-platform online business.
Mr. Nguyen Lac Huy, representative of CellphoneS, said that to maintain sales, it is necessary to meet all customer needs as well as have differentiated sales programs, preferential treatment for member customers, payment incentives, and a variety of payment methods, including 0% installment interest. In addition, CellphoneS also has a preferential program exclusively for teachers, students, and university students.
