With a population of approximately 90 million and annual GDP growth of 6.78 percent, Vietnam represents a significant growth market for U.S. exporters of consumer electronics. The consumer electronics devices market is forecast to increase at a compound annual growth rate (CAGR) of 11% through 2015. The industry?s annual market revenue reached $4.3 billion in 2010, and is expected to increase to $7.1 billion by 2015. The Government of Vietnam (GVN) also sets forth a roadmap for policy implementation which is expected to attract investment and reduce barriers to entry for imports as the country orientates itself for becoming an industrial country.
With the world?s 12th largest population at 90 million, Vietnam is a promising destination for U.S. consumer electronics and associated companies. A young population also means that they are ready, capable, and willing to pay for more consumptions. Vietnamese consumers trend toward „fashionable trends?, so they tend to purchase smart-looking, branded goods.
The vast and relatively underpenetrated rural market presents a significant growth opportunity as the government rolls out measures to boost rural incomes. Although per capita annual GDP currently stands at $1,000, unofficial estimates put per capita GDP in Hanoi and Ho Chi Minh City (HCMC) as high as $3,000, hinting at disposable income levels of a well establish middle-income market and a market on the verge of significant demand growth.
The consumer electronics market in Vietnam, mainly defined as addressable audio-visual products, computing devices, mobile handsets and gaming products, reached $4.3 billion in 2010 with Vietnam?s Northern market accounting for 40% and Southern market accounting for 60%. It is expected to increase to $7.1 billion by 2015, driven by growing affordability of major products and rising disposable income levels.
Market demand for consumer electronics equipment continued to grow, although price cuts hit margins, especially as the price of the dollar had remarkably increased in local currency terms. At the year-end of 2010, festive season sales of popular electronics products surged due to aggressive promotions and price cutting, with prices of many goods cut by 50%. Computing devices accounted for approximately 35% of Vietnam?s consumer electronics spending in 2010. Official forecast says Vietnamese domestic market computer hardware sales (including notebooks and accessories) of $1.5 billion in 2010, increased from $1.3 billion in the previous year. Computer hardware CAGR for the 2010-2015 period is forecasted to reach about 15%, with notebooks accounting for about 30% of shipments. Audio-visual devices accounted for roughly 25% of Vietnam?s consumer electronics spending in the year 2010. Vietnam?s domestic audio-visual and gaming device subsector is forecast at $1.5 billion in 2011. It is estimated that the market would grow at a CAGR of 15% during the period 2010-2015 and could reach $3 billion at the end of the forecast period. Video applications account for around 75% of the total market. Market demands for 3D/Full HD/HD LED/LCD/plasma TV sets and multi-media players are amazingly increased. With the remarkable increase in the number of vehicles in the Vietnamese market, the subsector for GPS devices and automobile after-market audio-visual devices has become a promising opportunity for equipment suppliers from China, Japan, and the U.S.
Vietnam?s broadcasting industry has developed rapidly in recent years. At present, Vietnam has one national television station (VTV), one national radio station (VOV) and four inter-provincial broadcasting stations. Additionally, each of the country?s 63 provinces and cities has its own local broadcasting station. Apart from these broadcasters, other new entrants include cable television, satellite (DTH/Direct-to-Home) and on-line television providers. In terms of network convergence, as noted above, voice/data networks are available nation-wide and “triple play” networks
(voice/data/video) and broadband services have been developing in large cities. Moreover, 40 percent of the country?s broadcasting facilities have been digitalized. Market annual growth in 2010 was estimated to have reached approximately 28 % and is expected to reach 30 percent in the next 2-3 years. Digitization covers up to 40% of country?s technical facilities. The local broadcasting industry plans to reach full digitalization by the year 2015. Market size in 2010 was estimated to be at $400 million.
Industry statistics show that Vietnam?s mobile handset sales accounted for approximately 40% of Vietnam?s consumer electronics spending in 2010. Total Vietnamese market handset sales are expected to grow at a CAGR of 11% to US$2.5 billion in 2015, as mobile subscriber penetration soars towards 260%. The inaugural Vietnamese 3G mobile services launched by a series of local mobile networks provided a boost, but the market remains dominated by low-priced handsets. Vietnam?s Ministry of Information and Communications (MIC) has recently granted a 4G-LTE (long-term evolution) pilot license to a number of telcos, namely: VNPT, Viettel, FPT, CMC Telecom and VTC. After the one-year pilot, licenses for this service will be issued through tender
In terms of the technologies used in Vietnam?s mobile phone networks, of the seven licensed mobile network operators, five run global systems for mobile communications (GSM) networks (VinaPhone, MobiFone, Viettel, Vietnamobile, and Beeline), and two run code division multiple access (CDMA) networks (S-Fone, and EVN Telecom). A few potentially new entrants, including Indochina Telecom and VTC Telecom, plan to run their services based on other operators? existing networks. GSM mobile networks presently account for more than 95 percent of the mobile phone market share. According to figures reported by network operators to MIC, as of 2010, with a 90 million population, the total number of mobile phone subscribers in Vietnam was approximately 150 million, of which more than 90 percent were pre-paid subscribers. However, industry specialists estimate that there are only 50 million actual subscribers (i.e. being operational).
As in other markets, the market potential for consumer electronics goods in Vietnam is in part driven by the development of the application environment. In recent years, numerous local cable TV service providers have been facilitating increased consumption of 3D/Full HD/HD LED, LCD and plasma TV sets, while the 3G mobile phone or NGN technologies will permit phone terminal manufacturers to increase their sales of their most current models.