Driven by 4G phones as well as high pent-up demand in the fourth quarter of the year, Vietnam’s smartphone shipments grew by 11.9% to 15.9 million units in 2021.
According to the International Data Corporation’s (IDC) Quarterly Mobile Phone Tracker, vendors shipped a total of 5.1 million units in 4Q21, up 107.3% quarter over quarter (QoQ) and 31.6% year over year (YoY) when the authorities started to take a step-by-step approach to restore social and economic activities.
“Vietnam faced its first major lockdown since the start of the pandemic in major cities through September 2021, making a big impact on the smartphone market due to the closure of shops and malls,” said Thanh Vo, Research Analyst at IDC Vietnam.
“The smartphone market gradually became active again in the last quarter of the year, as there was a significant pent-up demand, helping stores' sales recover. However, component shortages started to have a meaningful impact on the market,” he added.
According to the report, continued migration from 2G/3G to 4G/5G mobile phones, resulting in Vietnam having the highest growth in the smartphone market amongst the ASEAN countries in 2022 as smartphone adoption picks pace.
Meanwhile, continued migration to 5G smartphones, with 5G smartphone shipments expected to more than double YoY, making up more than a quarter of smartphone shipments in 2022, as more affordable 5G smartphones enter the market, and the telcos move beyond the trial phase into launching commercial 5G services in the country in 2022.
In the meantime, a change in the retail landscape is expected as the vendors opt for brand-exclusive stores.
The mobile phone market in Vietnam is distinct from the rest of ASEAN as it is dominated by a few major mobile phone chain stores such as the Mobile World and the FPT Shop. This makes it tough for the smaller stores to compete with these companies. These chain stores, on the other hand, differentiate themselves on pre and post-purchase services or partner with vendors by opening brand-exclusive stores.
Vietnam's largest conglomerate Vingroup officially announced its decision to exit the smartphone market in 2021 and focus on its other priority areas. Vingroup had previously risen to the number three position in the Vietnam smartphone market in 2019, which it maintained in 2020.