Vietnam’s richest man, Pham Nhat Vuong, is stepping up his efforts to grab a share of the domestic smartphone market from foreign rivals such as South Korea’s Samsung.
Vingroup, the conglomerate controlled by Mr Vuong, aims produce up to 5m handsets a year by 2021, a group executive told the Financial Times, underlining the company’s ambitions to reshape a smartphone market that it only entered last year.
Katherine Nguyen, who heads the company’s VinSmart unit, said its goal was to have its handset plant in Haiphong, northern Vietnam, operating at full capacity within two years, as a range of upgraded models attract consumers buying phones for the first time.
“The pie is huge, and the consumer desire and need is growing,” Ms Nguyen said in an interview. She said the company was also planning to build a second handset plant west of Hanoi in Hoa Lac province, the same place VinSmart plans to begin producing “smart” TVs in the third quarter of this year.
Vietnam’s communist government is rewriting regulations in areas such as autos and pharmaceuticals trying to promote local companies such as Vingroup after years in which its economy was dominated by foreign competitors like Samsung, which makes about half of its mobile phones in the country.
However, analysts warned that the production target was a testing one at a time when global consumers’ enthusiasm for smartphones shows signs of waning, and in a country where Samsung and China’s Oppo control more than half of the market.
“If Vingroup wants to achieve the goal of 5m by 2021, they would have to do two things: build up their brand value, and beat Samsung and Oppo on marketing and branding,” said Rushabh Doshi, research director of Canalys, the mobile technology research group.
Vingroup, which is Vietnam’s largest private company, announced a launch into technology last year, opening an artificial intelligence and big data analysis division and unveiling four phone models under the Vsmart brand.
“The vision for now is not only to create a smartphone,” Ms Nguyen said. “We are looking at the whole ecosystem, to create a seamless, connected life [and] help people to connect with their loved ones, with different things in their lives.”
Vingroup would also need to “find a good synergy” with retail companies who play a dominant role in the domestic mobile phone market, Mr Doshi said. Vietnamese consumers bought about 15m phones last year, a number Canalys forecasts will reach nearly 17m in 2021.
Outside Vietnam, Vingroup is selling its Vsmart phones in Spain, where it has a majority stake in BQ, an electronics maker. Alongside plans to sell phones in Russia and Ukraine, the company will soon launch in Myanmar, where Vietnam’s dominant mobile provider Viettel launched the Mytel network last year.
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