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Trailblazers

Member Name: Phạm Hà Nguyên

Profile
DoB: 25/07/2003
University: VNU University of Economic & Business

Name: Nguyễn Anh Thư

DoB: 13/04/2003
University: Academy of Finance

Name: Lê Hoàng Vũ
DoB: 05/09/2003
University: Academy of Finance

Name: Lê Quang Trường

DoB: 17/01/2003
University: VNU University of Economic & Business

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Trailblazers

1. EXECUTIVE SUMMARY
In 2023, the global economy faced significant challenges, including
economic slowdowns, rising inflation, and political instability driven by
ongoing conflicts. These factors had a broad impact on industries around
the world, including Vietnam’s consumer electronics sector. Attempts to
curb inflation through tighter fiscal and monetary policies further
dampened global growth, disrupting trade, investment, and overall market
dynamics. Being closely connected to international supply chains,
Vietnam's consumer electronics sector has felt the impact of the global
economy volatility.

This research examines the effects of these global economic

challenges on the consumer electronics industry in Vietnam, utilizing the
PESTEL and Porter’s Five Forces models. The analysis focuses on the post-
COVID-19 era, shedding light on the industry's recovery and the influence
of global events.
Key findings include:

 Political stability in Vietnam has consistently attracted both

domestic and foreign investment. This stability, combined with
business-friendly policies, has created an environment favorable for
the growth of the consumer electronics sector.
 Economic growth has been driven by a rising middle class and
higher disposable incomes, leading to increased demand for
consumer electronics. Despite experiencing inflationary pressures,
with a 3.25% rise in the CPI, the overall economic stability persists.
 Social factors: Vietnam's young workforce is supporting industry
growth, although challenges such as an aging population and
insufficient investment in education need to be addressed for
sustained development.
 Technological advancements have contributed to the sector’s
expansion, with high-tech exports accounting for 35.1% of total
trade. The smart home devices market revenue is expected to
exceed VND 12.7 trillion by 2028.

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  Environmental challenges remain a concern, and while certain
progress has been made, issues like air and water pollution
potentially undermine long-term economic stability if not addressed
properly.
 Legal factors involving tax incentives for R&D, as well as tax
breaks for high-tech investments, have encouraged innovation
within the consumer electronics sector.

The competitive landscape is intense, largely due to the industry's

capital-intensive requirements and the strong presence of major players
like Samsung, Apple, and Xiaomi, which reduces the risk of new
competitors entering the market. Supplier power is also strong, owing to
the industry's reliance on imported components from a few suppliers.
Customer power remains high because of low switching costs and variants
of the product options.

Looking ahead, the Vietnamese consumer electronics market is

expected to grow at a compound annual growth rate (CAGR) of 2.16%,
reaching an estimated revenue of VND 172.3 trillion by 2024. The main
drivers of this growth are the rising use of smart devices, expanded e-
commerce access, and a demographic shift towards an aging population,
which are expected to boost demand for health-focused electronics.

The research concludes with strategic recommendations for

businesses in Vietnam’s consumer electronics industry. These
recommendations focus on product innovation and the importance of
product innovation, such as energy-efficient inverter technology, as well
as adopting competitive pricing, implementing omnichannel retail
strategies, and utilizing personalized marketing to stay competitive in the
rapidly changing market.

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Trailblazers

2. PESTEL ANALYSIS

Figure 1: Viet Nam GII 2023 rank

Political Factors
Vietnam is well-known for its
political stability and high rankings
in Institutional and Business
environment indicators, which
reflect the country’s effective
Figure 2: Lower middle-income economies
management, policy
implementation, and oversight of
the private sector. This stability and
efficiency make Vietnam an
attractive destination for both
domestic and foreign investment,
1
particularly in the consumer
Figure 3: Institution Indicators
electronics industry.
Economical Factors
Vietnam’s expanding middle class
and increasing disposable income
have boosted spending on various
goods and services, including
consumer electronics. In 2023,
domestic credit to the private sector
Figure 4: Human Capital and Research
reached 115.5% of GDP due to the

1
NOTES: ● indicates a strength; ○ a weakness; ◆ an income group strength; ◇ an
income group weakness; * an index; † a survey question. ⏲ is used when the available
economy data are older than the base year; see appendices for details, including the
year of the data, at wipo.int/gii-ranking. Square brackets [ ] indicate that the data
minimum coverage (DMC) requirements were not met at the sub-pillar or pillar level.

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Indicators government’s expansionary
monetary policy, including interest
rate cuts and efforts to stimulate
private sector growth. FDI has also
been a key driver, with net inflows
constituting 4.6% of GDP in 2023.
This influx of investment,

Figure 5: Infrastructure Indicators

particularly in consumer electronics,
supports industry expansion and
innovation. The CPI increased by
3.25% in 2023 compared to the
previous year. While this indicates
some inflationary pressure, it
remains moderate, suggesting
stable economic conditions overall.
Figure 6: Market Sophistication Indicators
Social Factors
Vietnam benefits from a "golden
population structure" with a large
workforce. The workforce, however,
faces challenges due to an aging
population and limited investment in
education. In 2023, education
expenditure was only 3% of GDP,
which is low compared to global
Figure 7: Business Sophistication Indicators
standards.
Technological Factors
Vietnam's infrastructure is robust for
a low-middle-income country. In
2023, gross capital formation was
34.7% of GDP, indicating substantial
investment. The country’s R&D
spending at 0.4% of GDP supports
technological progress, leading to

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Figure 8: Knowledge and Technology Output 5.3% labor productivity growth.
Indicators
High-tech exports made up 35.1% of
total trade, while creative goods
accounted for 7.7%.
Environmental Factors
Despite Vietnam's rapid economic
growth, it faces significant
challenges in achieving ecological
sustainability. Low environmental
quality, as indicated by the EPI, calls
for improved policies and
sustainability investments. Issues
like pollution, deforestation, and
poor waste management could
threaten long-term economic
stability and biodiversity.
Legal Factors
The 2020 Law on Investment and
Decision 29 provide tax incentives
and fee exemptions for R&D and
high-tech investments in Vietnam.
This can boost the Consumer
Electronics industry by attracting
foreign investment, encouraging
innovation, and helping the country
move up the value chain.

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Trailblazers

3. FIVE FORCES ANALYSIS

Scorecard
Threat of New Entrants
Threat of New 2
Competitive Rivalry Threat of Substitution
Entrants
Threat of 1
Substitution
Power of Suppliers Power of Customers
Power of Customers 4.5
Power of Suppliers 3.5
Figure 9: Five Forces Analysis Competitive Rivalry 5
Threat of New Entrants – Low Competitive Rivalry – High
- The consumer electronics - The largest segment in Vietnam is
industry requires significant initial Telephony, with 3 major global
capital investment for PPE and suppliers: OPPO (27%), Samsung
R&D expenditure on high-tech (21%), and Xiaomi (20%) market
products to meet consumer share in Q2/2024.
expectations and stay ahead of - R&D expenditures are constantly
technological advancements. increasing to produce new
- Major brands like Samsung, products and enhance the
Apple, Xiaomi, control large market business’ existing offerings.
shares and strong retailer - Similar products within the
relationships. industry with little brand
differentiation and low switching
costs between brands enhance
competition.
Power of Customer – High Power of Suppliers – Moderate
- Intense competition between - Companies rely on imported high-
international and domestic brands, tech components, like
coupled with a wide range of semiconductor chips and OLED
products, supports the bargaining screens, from a few suppliers such
power of customers. as South Korea and Taiwan.
- Switching costs are low due to - High switching costs and global
readily available information as concentration of major suppliers

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customers can read feedback and strengthened supplier bargaining
well-informed judgments after power.
comparing brands and products.
Threat of Substitution – Low
- The threat of substitutes for the
industry has minimal pressure
since electronic products like TVs
and e-readers (e.g., Kindle) have
replaced traditional products such
as books. Consumers also
increasingly seek the latest
technology.

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Trailblazers

4. MEGATRENDS & GROWTH DRIVERS

Figure 10: Market Value Forcast 2024 - 2029

Market Value Forecast 2024 –

2029
In 2024, the revenue in Vietnam's
consumer electronics market is
projected to reach 6,890 million USD
and is anticipated to have an annual
Figure 11: Revenue of the consumer growth rate of 2.16% (CAGR 2024-
electronics market in Vietnam from 2019
to 2029 (in million U.S. dollars) 2029). The largest segment within the
market is Telephony, with a volume of
4,184.0 million USD in 2024.
Covid 19 Pandemic
The 2018-2023 period, presented both
challenges and opportunities for

Figure 12: Viet Nam Consumer Electronics Vietnam’s consumer electronics

Sales Channel
sector. Lockdowns disrupted supply
chains and caused semiconductor
shortages, but demand for home-
office electronics surged due to
remote work and online learning. The
shift to online shopping, accelerated
by COVID-19, led to significant growth

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 in sales across e-commerce platforms
with revenue from mobile phones and
tablets growing from under 10 trillion
VND to nearly 14 trillion VND (2022–
2023).

Technology Disruption
With the rise of smart devices and IoT,
Figure 13: Viet Nam Age Structure in 2023
smart home, wearable, and connected
products have become more common.
Smart home sales are expected to
reach VND 12.7 trillion by 2028. E-
commerce growth is driving demand
for electronics, with online sales
projected to make up 41.3% of the
market by 2027. Traditional retailers
like MWG and FPT face fierce
competition from platforms like
Shopee, Tiki, and Lazada, where
smartphone sales reached VND
8,504.4 billion in 2023. To stay
competitive, they are boosting their
online presence and investing in R&D
to keep up with technological
advances and changing consumer
preferences.
Demographic Shifts
An aging population presents both
challenges and opportunities for the
Consumer Electronics sector. The 24-
50 age group, a key driver of
technology consumption, will continue

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fueling demand as younger
generations follow similar patterns.
Additionally, the aging population will
boost demand for health-related
electronics, opening new market
opportunities. Companies must adapt
and innovate to meet the evolving
needs of both current and future
consumers.

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Trailblazers

5. STRATEGIC RECOMMENDATIONS

5.1. Product Strategy Customer: Since Vietnamese

consumers are willing to pay more
Inverter Technology:
for the lastest products.
Vietnamese consumers are
Businesses should adopt value-
increasingly aware of energy
based pricing, pricing based on
consumption, and inverter
the benefits for customers. High-
technology reduces electricity
demand items like smart
costs, aligning with environmental
electronics and health tech can be
concerns. Therefore, companies
priced higher.
should invest in inverter products
(e.g. air conditioners) to meet Cost: The prices of high-tech
customers’ expectations. components influenced by large
suppliers. Strategies like long-
Product Quality: In Vietnam’s
term contracts or diversifying
competitive market, product
suppliers can help reduce total
quality is a key differentiator.
costs and keep prices
Focus on durability and reliability
competitive.
can boost customer satisfaction
and build a brand reputation. Competitors: Consumer
electronics industry in Vietnam is
Product Integration: The
highly competitive, especially
growing adoption of smart home
with the presence of major brands
technology presents an
like Samsung, OPPO. Businesses
opportunity to create products
should apply a competitive pricing
that offer convenience and
strategy, keeping prices
interconnectivity, enhancing the
reasonable while maintaining a
customer experience. Develop
profit margin.
products that can seamlessly
integrate with smart home Corporate objectives: For the
ecosystems (e.g., IoT-enabled objective of market share growth,
devices). penetration pricing can attract
new customers. To maximize
5.2. Pricing Strategy
short-term profits, price skimming
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can be used for new tech
products.

5.3. Placing Strategy

Balance between physical stores

and e-commerce. Consider
opening flagship stores on main
streets in major cities to enhance
brand visibility. In addition, focus
more on e-commerce and logistics
to enhance distribution.

5.4. Promotion Strategy

Leverage digital trends by

investing in data-driven
advertising, personalization, AI to
optimize marketing strategies.
Simultaneously, collaborate with
major retailers, KOLs, and online
platforms such as Lazada,
Shopee, and TikTok for large-scale
advertising campaigns. Highlight
health-protective products like air
purifiers in social media
campaigns to strengthen brand
recognition and stay competitive.

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Trailblazers

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