15 June 2023

Vietnam’s smartphone market declined 30% year-on-year (yoy) in the first quarter of 2023, according to Counterpoint Research’s Vietnam Smartphone Channel Share Tracker, marking the industry’s worst Q1 decline ever.

Poor macroeconomic conditions and weak consumer demand constrained the country’s smartphone market as people delayed their smartphone purchases during the period.

Vietnam’s GDP grew 3.3% during the quarter, one of its lowest numbers in recent years. Investment into the country declined as FDI volumes were reduced. Citing poor business conditions, retailers had to scale back their expansion plans and re-evaluate their business strategies. Retail stores operated for fewer hours, which reduced the employees’ working hours and their incomes as well. Footfall in the retail stores was also quite low after Vietnam’s Tết festival in January.

“The demanding situation in the Vietnam smartphone market is unlikely to be resolved in Q2 2023. It will take some time for the smartphone market to recover in light of the difficulties that the economy has suffered. Vietnam, being one of the top global exporters of smartphones, will also look for the global economy to stabilize. When the situation starts to improve by the end of 2023, the market may benefit from the pent-up demand, especially in the lower-price segments,” said senior analyst Glen Cardoza.

The Vietnamese government considers 5G connectivity as a crucial factor in the pursuit of digital transformation. It aims to have 100% of the population’s devices connected to a 5G network by 2030. 5G smartphone shipments are on the rise, climbing 18% yoy in the first quarter of 2023. Although shipments of 5G smartphones in the below $200 retail price segment are yet to pick up pace, 5G smartphone shipments in the $200-$400 price band doubled from that in the year-ago quarter.