Pico not giving up on electronics market
Pico not giving up on electronics market
Pico failed to close the merger and acquisition deal with Central Group, but has not yet given up on the electronics retail market.
According to Trinh Duc Tuan, deputy director of Pico, the deal fell through but Pico was ready to cooperate with domestic or foreign partners in any way, and that many have already proposed Pico and are being considered.
“We are ready to welcome investors but the sides need to evaluate each other. We only choose partners with the same views and strategy,” he said, adding that Pico wanted to expand its scale of operation.
Tuan said that in 2016 Pico was going to expand in Hanoi, where Pico was already strong. He said the north and Ho Chi Minh City were also in the plan, but the company had yet to choose specific cities. Pico is also considering developing a separate chain for mobile and telecommunication equipment. It plans to have 30 stores in Hanoi by the end of the year and develop ecommerce at the same time.
The Vietnamese electronics retail market is still posting steady growth. According to market research company GfK, in 2015, the market grew by 20 per cent. Mobiles and tablets currently accounts for 50 per cent of sales and grew by 25 per cent last year. This market segment holds the best growth prospects in the mid to long-term.
Some products that used to be considered high-end, such as 3D LED TVs, heating machines, and air filters, are now considered necessities. This means that the market still holds a great potential for growth.
However, now consumers have a larger choice of retailers. Besides Nguyen Kim, Vinpro is also expanding, along with other electronics retailers. In the context of fierce competition, companies need to reinvent themselves to survive.
These days, electronics retailers in Vietnam are almost indistinguishable. Because they are so similar, they are forced to compete in price, which hurts their profit and is not sustainable on the long run. Experts say that current market dynamics will lead to the disappearance of some retailers.
At the beginning of 2015, Thai company Central Group bought 49 per cent of NKT New Solution and Technology Development Investment JSC, the owner of 21 Nguyen Kim electronics shopping centres in Vietnam. After the purchase, Central Group targeted to expand Nguyen Kim to have more than 50 stores in the whole country by 2019. However, Nguyen Kim is only strong in the south of Vietnam, prodding Central Group to try and find a strong parner in the north, making Pico a potential candidate.
10 years ago, Pico was a pioneer of electronics retailing. At a time when people still bought electronics from small stores on “electronics streets”, such as Hai Ba Trung and Hang Bai, Pico appeared and changed consumption habits. However, facing increasing pressure from similar electronics shopping centres, Pico is scaling back and has the smallest number of stores in the market: a mere six, four in Hanoi and two in nearby northern provinces, compared to the 76 Dien May Xanh stores owned by Mobile World Group, or the 14 HC stores or 22 Media Mart stores.
