Profiting from the Penny-Pinchers: How Electrical Appliance Retailers Thrive by Targeting the Thrifty

Mr. Lien Binh Thai, Business Manager at Cho Lon Supermarket of Electronics in Ho Chi Minh City, explained that consumers often have a need to purchase, replace, and upgrade home appliances with smarter features, energy efficiency, and health benefits. “Even during the COVID-19 pandemic, while electronics sales were slow, home appliance products witnessed a significant surge in demand, with a 30-50% increase in sales compared to pre-pandemic times,” Mr. Thai illustrated with an example.

Numerous electronics supermarket systems in Ho Chi Minh City have confirmed that home appliance items attract many buyers due to their affordable prices, eliminating the need for customers to deliberate too much before purchasing. Some products, such as rechargeable table fans priced at only 69,000 VND, kettles at 99,000 VND, blenders at over 170,000 VND, juicers at more than 100,000 VND, and hair dryers at 120,000 VND, are selling well. “The advantage of these products is that they don’t go out of style; in fact, many models have been on the market for over a decade and are still popular among buyers. Consequently, manufacturers don’t have to invest large sums in continuously developing new models, as is the case with electronics,” revealed a representative of an electronics supermarket chain.

Mr. Nguyen Viet Anh, Deputy General Director of FPT Retail, assessed that the home appliance market is substantial, with FPT Shop generating over 400 billion VND in revenue annually, and it is expected to grow in the coming years due to rapid urbanization. Meanwhile, Mr. Pham Cong Bang, Sales Director of Hisense Electronics, attributed the strong sales of home appliance products to consumers’ lack of brand preference and less intense competition compared to electronics.

Notably, according to retailers, the profit margin for home appliances is 5-10% higher than that of electronics. Many home appliance items are priced very high, reaching tens of millions of VND, resulting in substantial business profits. Moreover, the goods are compact and do not require extensive warehouse investments for imported or stockpiled inventory.

Mr. Tran Ngoc Thien, director of a Ho Chi Minh City-based company specializing in distributing televisions to provinces, shared that for the past five years, operating in this industry has been challenging, often resulting in losses and high inventory levels. However, since the beginning of 2024, his company shifted its focus to selling home appliances and quickly achieved the desired sales figures. “The home appliance industry is about to experience a significant surge with the influx of low-cost products from China, which are currently being amassed near the Vietnam border. Numerous live streaming sales sessions have already been conducted. Therefore, domestic retail systems must devise countermeasures to avoid losing market share,” cautioned Mr. Thien.