Can electronics specialty stores survive?
16-03-2015 14:28:31+07:00
Can electronics specialty stores survive?
Two years ago, TopCare, HomeOneand Best Carings were outmuscling competitors across the country by offering one-stop shopping for the latest televisions, computers, videogames and gadgets.
The rise of online competitors offering lower prices and downloadable products has siphoned customers and sales from these once-powerful retailers. This combined with already weak domestic demand has heightened competition in the marketplace.
The retail chains are responding with turnaround strategies that highlight that old adage – location, location, location – and understanding that the physical location of a business largely determines how successful it will become.
They are alsocoming back with strategies that highlight their ability to obtain hot new smart phones and tablets and capture those purchases that consumers still prefer to make in person.
But they concede they have to evolve fast.
A representative of Power Buy, a leading Thailand electronics store owned by Thailand’s second richest person said his company understands the importance of location and that’s why it recently acquired a 49% stake in one of Vietnam’s largest shopping centre chains, Nguyen Kim Trading JSC.
Nguyen Kim is among the biggest electronics shopping centre operators in Vietnam, currently running 23 stores nationwide.
“There is a bright future for consumer electronics in retail in Vietnam”, the representative said adding that his companybelieves Nguyen Kim centres offer prime locations from which to retail its products.
VinPro Trading and Services Company Ltdrecently announced that it is planning to enter the enter electronics market and open four new stores in trade centres this March and increase that number to 25 by year’s end.
It was also announced that the company has extensive plans to beef up its online shopping and digital download division for electronics and related products.
The Gioi Di Dong company recently announced that it believes there are greener pastures in the rural market and it has plans to sink nearly VND50 billion into the smaller communities around the country.
A spokesperson said the company plans to expand rapidly by acquiring prime locations through mergers and acquisitions to shortcut the lengthy time it takes construct new facilities and wait for them to mature.
Nguyen Duc Tai, Head of The Gioi Di Dong opines that large malls are not the best of locations for electronic stores.
"We're trying to capture growth in the smaller communitiesof the country that are exploding,"
“Consumers also don’t like to buy products such as televisions and refrigerators in electronics stores in large shopping malls,” Tai said adding that they prefer to go to malls for dining and entertainment.
He also suggests that most consumers preferto purchase electronics in person so they can touch the product as opposed to acquiring through online shopping.
But retail experts question whether electronics specialty stores can survive in Vietnam as the economics of the industry have evolved—and not to the benefit of most specialty retailers.
Consumers today can often find the same television models for similar prices at BigC or Lotte as they shop for groceries and paper towels, eliminating the need to enter a specialty store.
