Why are companies rushing into the smartphone segment with a price tag of 10 million in Vietnam?

Last week, Oppo launched two Reno7 series models, including Reno7 5G and Reno7 Z 5G. Mr. Do Quang Kha, Director of Oppo Vietnam, affirmed that these are two strategic products of this company this year. Thanks to market demand, plus the focus on sales, these products received 12,000 orders in the order-opening phase – a rather large number in the upper and lower segment of 10 million dong.

Just a day later, Samsung launched market global Galaxy A series, including A33 5G, A53 5G and A73 5G. In which, Samsung opened for sale in Vietnam the Galaxy A53 5G model for VND 9.99 million, 500,000 lower than the Oppo Reno7 Z 5G model.

Earlier this month, Realme launched the Realme 9 Pro + model, equal to the price of Samsung A53 5G.

Also in March, Poco introduced the X4 Pro 5G in Vietnam very quickly after it was introduced at Mobile World Congress 2022, with a selling price of VND 7.49 million.

Thus, only in March, all 4 companies launched strategic smartphone models targeting the segment from nearly 8 million to 11 million dong. This is considered a new “fire pan” of firms in Vietnam.

Explaining this, Mr. Nguyen Lac Huy – representative of CellphoneS said that the scale of Vietnam’s mobile market in 2021 will reach about 110 thousand billion VND. The segment of 8 -11 million dong currently accounts for about 11 trillion dong, the profit is better than the low segment, so many companies are jumping in at the same time.

“This segment is also an important stepping stone for brands to convince consumers to use higher-end products.”Mr. Huy replied to ICTnews. This is especially important for companies like Realme, Poco and even Oppo, when their high-end smartphone segment is still not comparable to Apple or Samsung.

Of course, even Samsung has noticed this trend and has joined the war with Galaxy A series models but with near-premium prices.

Counterpoint’s statistics show that the mid-range Galaxy A series is contributing to Samsung’s main sales. In 2021, this line accounts for nearly two-thirds of the company’s total smartphone sales globally.

According to GfK data in Vietnam, the smartphone segment from 8 to 11 million dong is growing in 2022. Specifically, in 2021 the number of smartphones in this segment accounts for 6% of the market, but has increased to 8% in the beginning. this year, the proportion of revenue also increased slightly to 14% compared to 13% last year.

If you observe the market, you will see that phone companies such as Oppo, Xiaomi, Vivo, etc. previously expanded their market share with smartphones in the popular segment 2-3 million, then expanded to 3-5 million, 5-8 million and is increasing presence in the segment of 8-11 million.

The launch of products at the range of about 10 million VND also helps to raise the brand image of some unknown brands. In addition, young users – who are the main customers of Chinese smartphone manufacturers – are having better incomes, easily buying products at increasingly higher prices.

Mr. Phung Ngoc Tuyen, director of the mobile telecommunications division of The Gioi Di Dong, said that the low-end segment does not bring big enough profits for companies, even if there are products that sell more, they will lose money. This is also the reason why companies are directing customers to the higher price segment.