Mobile phone
distributors, who could not anticipate the low purchasing demand, imported a
big amount of mobile phones in the first quarter of 2011. However, the sales
have been going very slowly.

According
to the Industry and Trade Information Center under the Ministry of Industry and
Trade, in the first quarter of 2011, Vietnam imported about five million mobile
phones in the first quarter; an increase of 26 percent over the first quarter of
2010 (3.9 million mobile phones).

January
2011 was the month which saw the biggest import volume with 2.5 million mobile
phones imported. The imports decreased in February to one million, and then
increased again to 1.5 million in March.

Of the
imports, low-value phones priced at less than one million dong, accounted for a
big proportion. About 3.1 million mobile phones of this group were imported to Vietnam in the
first quarter of the year. Meanwhile, there were about 650,000 mobile phones
valued at less than two million dong.

Among the
most well known brands, Nokia is still leading the market, while the second
position belongs to Viettel, followed by Q-Mobile, FPT, Avio, Mobell and
K-Touch. The products with the above said brands accounted for 80 percent of
the imports in the first quarter.

The first
quarter was the time which had the biggest import volume so far. Explaining
this, an importer, who asked to be anonymous, said that importers tried to
import big amounts of mobile phones in order to prepare for the sale on Tet
month – February. Meanwhile, they also rushed to import mobile phones in March,
because they heard the decision on restricting the imports of mobile phones,
which took effects as of March 25. The importers wanted to import more mobile
phones to have products to sell in April.

However,
the importer said that since importers face big difficulties when collecting
dollars to make payment for imports, and since the purchasing power remains low
on the domestic market, the provisioned goods are not considerable.

It seems
that distributors could not imagine that the demand would be so low. The sales
have reportedly decreased by 30 percent when compared with the same period of
the last year. There are no official statistics about the mobile phone
inventory volume, but Saigon Tiep Thi has quoted its sources as saying that the
stocks had reached 1.5 million products by the end of March.

Especially,
the majority of inventories are low value mobile phones which have the prices
of less than 2 million dong, while the number of luxurious products is low.

Huynh Viet
Thuong, a senior executive from Vien Thong A, a big distributor in Vietnam, said
that distributors could not anticipate the low demand this year; therefore, the
inventories prove to be big.

“Retailers
cannot sell products, which will cause big difficulties to importers as well,”
Thuong said.

However,
according to Thuong, though the number of mobile phones sold is not big, high
grade products are still selling well.

According
to Dinh Anh Huan, Director of the Gioi Dien Tu distribution chain, it would be
not difficult to sell inventories, though he admitted that the demand is on the
decrease.

Huan
believes that the high inventory level would prompt importers to reduce the
import volume in the next months. Especially, the imports with the value from
one to five million dong would see sharp declines in the upcoming months.

Earlier
this month, local newspapers reported that big mobile phone manufacturers
announced the considerable price reductions of 10-30 percent for their
products, while Chinese and Vietnamese brand mobile phones only saw slight
decreases

The biggest
price decrease was seen with the Black Berry Bold 9000. Some Nokia’s models
such as E63, 1680, N97 mini, and 5230 saw the price decreases between 10.7 and
13.1 percent. Sony Ericsson U100i and Malata K200 had the price decreases of 13
and 11.7 percent, respectively.

Source: SGTT