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Tag: Electronics

  • KBank teaming with Com7 to expand the BaNanas IT stores

    KBank teaming with Com7 to expand the BaNanas IT stores

    Com7 has teamed with Kasikornbank (KBank) to expand the BaNana store chain, enabling younger consumers to access IT products and services more conveniently.

    Their first joint BaNana pilot branch was in Yasothon, and the two companies plan to have 20 more mini-branches by year’s end offering more diverse retail business and comprehensive financial services in Thailand, says Com7 CEO Sura Khanittaweekul.

    The listed company aims to achieve 600 branches under its management by the end of the year, up from 434 last year. Com7 has set an income-growth target of not less than 15 per cent for this year. Last year’s income came in at THB22.584 billion and net profit at THB608.8 million, both records for the business.

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  • Samsung Electronics to expand production in Vietnam

    Samsung Electronics to expand production in Vietnam

    Samsung is the largest foreign investor in Vietnam and accounts for around a quarter of the country’s total export revenue. Samsung Electronics Co. is determined to further expand production in Vietnam, co-CEO Koh Dong-jin told Vietnamese Prime Minister Nguyen Xuan Phuc on Friday.

    Samsung will recruit more Vietnamese employees and develop electronics in smart cities in Bac Ninh province and other places, according to a statement posted on the government’s website.

    Samsung is the largest foreign investor in Vietnam and accounts for around a quarter of the country’s total export revenue.

    Phuc told Koh that Vietnam is always willing to create the most favorable conditions for Samsung to develop in the country, the statement said.

    Samsung has invested $17.3 billion in eight factories and one research and development center in Vietnam, turning the country into its largest smart phone production base, the government said.

    Exports from Samsung Electronics’ factories in Vietnam totaled $54 billion last year, it said.

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  • Xiaomi files documents for IPO in Hong Kong

    Xiaomi files documents for IPO in Hong Kong

    Chinese smartphone giant Xiaomi has filed documents for an IPO on the Hong Kong stock exchange that could see the company raise at least $10 billion in the biggest public offer since 2014.

    The IPO is expected to value the company at between $80 billion and $100 billion, according to data and analysis company GlobalData. This would make it the largest IPO since Alibaba’s $25 billion public listing in 2014.

    GlobalData consumer technology analyst Avi Greengart said the listing would give Xiaomi the infusion of capital it will need to pursue an expansion to the West.

    “Xiaomi has long planned to enter the US. For now it is targeting Europe, starting with Spain, and we will be closely monitoring how the brand and its business model translates well outside of China,” Greengart said.

    “Xiaomi has said it plans to enter the US market ‘next year’ for the past three years. The US is famously unfriendly to Chinese brands right now. The bigger challenge is that carriers are the gatekeepers, the market is skewed heavily towards premium smartphones, and US consumers have expectations around brand and software that Xiaomi may have difficulty meeting.”

    The vendor’s “fascinating” business model involves selling phones in high volumes at low margins, and started with online-only operations, Greengart said.

    “However competitors such as Huawei eventually countered with online-only brands of their own, and Xiaomi was unprepared. The company was able to successfully regroup and move into retail outlets as well as online. Xiaomi’s also thinks of itself as an incubator and IoT ecosystem vendor, investing in dozens of start-ups selling everything from air cleaners to fitness bands to Segways.”

    Xiaomi’s IPO documents [PDF] show that the company recorded a 67.5% increase in revenue in 2017 to 114.62 billion yuan (HK$141.36 billion). But the company swung to a net loss of 43.89 billion yuan from a profit of 491.6 billion yuan in 2016.

    The company already has a presence outside of China, having rapidly grown to the top smartphone brand in India, IDC estimates. The research firm also puts Xiaomi at the number four spot globally in terms of smartphone market share, behind Samsung, Apple and Huawei.

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  • Apple acknowledge iPhone challenges

    Apple acknowledge iPhone challenges

    Analysis of the latest Apple sales figures shows that tech giant remains a phenomenal company, but it needs to regain the magic spark that used to be its hallmark.

    As usual, Apple’s performance is good on both the top and bottom lines. Revenue for the quarter jumped by almost 16 per cent, an impressive increase given last year’s strong results. Even more impressive was the 25.3 per cent leap in net income, an uplift that came despite a higher level of spending on research and development.

    But as good as the headline numbers are, there are some less satisfactory nuances in the underlying dynamics driving them. Foremost among these are sales of the iPhone. On the surface, revenue from iPhone sales, which rose by 14 per cent, looks strong. However, this is mostly pushed up by higher average prices rather than volume. Indeed, in unit sales terms, the number of iPhones sold rose by just 3 per cent over the same period last year.

    Given the high raw numbers that sit behind a 3 per cent unit uplift, such a criticism may seem petty. However, the second quarter last year was a weak one for the iPhone with sales down in both volume and value terms. As such, we would expect a much bigger uplift this time around. That this didn’t materialise, and that unit growth is well below the run rate for new phone launches, signals that the replacement cycle is slowing down. In essence, we maintain our view that Apple is struggling to persuade many consumers to update their phones.

    Failure to wow

    As I’ve have said before, this relative slowdown in iPhone sales is largely a function of Apple’s inability to come up with meaningful and valuable innovations that wow consumers. No matter how Apple tries to spin it, the iPhone X is essentially an incremental product that lacks the excitement and newness earlier models brought to the market.

    The same logic applies to many other product lines, including iPads and Apple Watch. These are good, quality items, however they are simply not impressing the market and Apple is losing its lustre in terms of producing compelling products. Apple has moved from a position of ‘must have this and must have it now’ to ‘might buy this at some point in the future’.

    Price increases may mitigate this but, ultimately, such a shift can only ever result in a softer sales performance.

    Adding new products, such as HomePod, into the mix provides potential new sources of revenue.

    However, with launches to date, Apple is not disrupting the market like it used to. HomePod is a case in point. Here, despite good technical specifications and design credentials, Apple was a latecomer to the smart speaker market. This crimped sales and puts Apple in direct competition with both Google and Amazon – against both of which it does not have a clear and compelling unique selling point. While we believe Apple can take a share of this market, we do not think it can win a decisive victory in the battle with other tech firms.

    One area of relative success, at least in revenue terms, is services. However, this is an area where we think Apple needs to push harder. Amazon is successfully creating an ecosystem of services through Prime. Apple needs to do something similar by building on its Apple Music subscription and its App Store offering. Content is a big growth area and is becoming increasingly linked to devices. Apple needs to play more heavily in this space both to generate new opportunities but also to defend its own device business.

  • Xiaomi signs a partner deal with LightInTheBox Holding

    Xiaomi signs a partner deal with LightInTheBox Holding

    Global online retailer LightInTheBox Holding has signed a strategic distribution agreement with Xiaomi to sell its technology products in North America.

    It is Xiaomi’s first cross-border e-commerce distribution partnership in the region, and customers buying its products through LightInTheBox platforms will receive local customer support from Xiaomi.

    Founded in 2010 by entrepreneur Lei Jun, Xiaomi is based on the vision “innovation for everyone”.

    The Beijing-based company incorporates customer feedback into its product range, which includes Mi and Redmi smartphones, TVs and set-top boxes, routers and Mi Ecosystem products including smart home products, wearables and other accessories. Xiaomi has a presence in more than 70 countries and regions.

    With its headquarters in Beijing, LightInTheBox websites and mobile applications are available in 23 languages and cover more than 80 per cent of global internet users.

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  • Samsung tips record first quarter profit as chip boom winds down

    Samsung tips record first quarter profit as chip boom winds down

    Samsung Electronics tipped a surprise record first-quarter profit on Friday but market reaction was muted due to growing concerns that the semiconductor boom that has driven the South Korean tech giant’s earnings is about to end.

    Samsung shares fell after the announcement as analysts forecast similar or lower profit in the second quarter, due to slower growth in DRAM chip prices and higher marketing costs for the flagship Galaxy S9 smartphone.

    “Even if profits start falling in the second half, Samsung will have a strong balance sheet this year,” said Song Myung-sup, analyst at HI Investment & Securities, predicting looser supply of DRAM chips to start driving down prices.

    The global semiconductor leader and Apple Inc smartphone rival forecast January-March profit to leap 57.6 percent from a year earlier to 15.6 trillion won (US$14.7 billion), beating an average forecast of 14.5 trillion won from a Thomson Reuters survey of 21 analysts.

    Revenue for the quarter was tipped to rise 18.7 percent to 60 trillion won, Samsung said in a regulatory filing. The company did not elaborate on its performance and will disclose detailed earnings in late April.

    Samsung shares fell as much as 2.7 percent on Friday before paring losses to close down 0.7 percent, compared to a 0.3 percent drop in the wider market.

    Analysts said Samsung’s shares were affected by a UBS report forecasting an increase in the supply of DRAM chips used in servers, which dragged down Micron Technology Inc shares more than 6 percent on Thursday.

    The prices of NAND chips commonly used in mobile devices began falling late last year and analysts have been closely watching for signs of the peak in the DRAM price boom as well.

    Even if DRAM price growth is at its peak, analysts said Samsung remained on track for record annual earnings.

    “Although gains in memory chip prices have slowed from the height of the chip boom, lower prices could also increase demand for chips, and Samsung has the cost-cutting ability to keep profits up,” said Greg Roh, analyst at HMC Investment & Securities.

    MOBILE BUSINESS

    While the chip business underpinned Samsung’s profit growth, the mobile business – which accounted for 40 percent of 2017 revenue – appeared to have made a surprisingly solid contribution to first-quarter earnings, analysts said.

    They put this down to Samsung’s early launch of its flagship Galaxy S9 device in March, healthy sales of older devices as consumers balk at the high price of new premium models, and a short-term dip in advertising costs.

    “I think lower marketing costs for the mobile business helped, because the first quarter is traditionally not a boom season for rival Apple, so Samsung did not need to spend a lot on marketing,” said Claire Kim, analyst at Daishin Securities.

    Worldwide smartphone shipment volumes shrank for the first time in 2017, and Samsung is coming under increasing competition from the likes of low-cost Chinese rival Xiaomi .

    Concerns about the smartphone market and a subsequent fall in demand for components like OLED screens – used in Apple’s iPhone X – are behind a roughly 5.3 percent fall in Samsung Electronics’ share price so far this year, from a record high in November.

    In a separate development, prosecutors searched the offices of a Samsung Electronics unit on Friday as part of a probe into allegations the conglomerate had sabotaged worker’s efforts to strengthen labor unions, a South Korean prosecutors’ office said.

    A Samsung spokeswoman said prosecutors had secured labor-related documents. She declined comment further.

     

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  • Kinpo to add 2 factories in Philippines

    Kinpo to add 2 factories in Philippines

    Consumer electronics maker Kinpo Electronics, viewing that production capacities for smart home appliances at two factories in the Philippines will be fully utilized in first-half 2018, will set up two more factories there in third-quarter 2018, with one for injection molding and the other for assembly, according to company president Simon Shen.

    The existing factories and the ones to be built in the Philippines belong to Kinpo Electronics (Philippines) in which Kinpo and its Thailand-based affiliate Cal-Comp Electronics hold a 81% and 19% stake respectively, Shen said, adding the Philippines-based subsidiary is expected to be listed on the local stock market in third-quarter 2018.

    Kinpo stepped into production of consumer 3D printers in 2017 and currently has a global market share of 23-24% Shen said, adding it will extend production to business-use 3D printers in 2018.

    Kinpo expects to globally ship 73,000 3D printers, including 500 for color printing, in 2017, and 100,000 units in 2018, consisting of 2,500-3,000 color models, Shen noted. A color 3D printer sells for US$35,000.

    Kinpo has also begun production of service robots for hospitals, hotels, retail stores and airports, with unit prices ranging from US$15,000-30,000, and 2018 target shipments are set at 300-500 units, Shen indicated.

    Kinpo expects to ship 10,000 units of HiMirror, a smart device for medical care of facial skin, in 2017 and will offer a second-generation model with target shipments of 50,000-100,000 units in 2018.

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  • Harvey Norman officially launches Kuching outlet

    Harvey Norman officially launches Kuching outlet

    Australian brand Harvey Norman marked a new milestone with the official launch of its first superstore in East Malaysia today at Vivacity Megamall.

    Established since 1982 in Australia with over 280 stores worldwide, the superstore here occupies a retail space of 46,806 square feet across two floors, featuring a unique retail experience in the country.

    According to Harvey Norman’s managing director for Singapore and Malaysia, Kenneth Aruldoss, the group is creating a revolution in the way customers connect with products and brands.

    “Consumers of today are changing — and therefore we have to change the way we do retail as well.

    “It is a first-of-its-kind shopping experience with a huge range of merchandises spread over two levels of retail space. The range is current and of the latest,” he said in his speech during the official launch today.

    Also present during the launch were Assistant Minister of E-Commerce Datuk Mohd Naroden Majais, Kuching South City mayor (MBKS) Datuk James Chan, Vivacity Megamall executive director Sim Yaw Hang and Vivacity Megamall director Alan Sim, as well as other officials from Harvey Norman.

    The store is set to inspire in terms of layout and how the products are being  merchandised. It boasts some of the biggest range of electrical, computers and communications, furniture and bedding products in Kuching.

     

    The first level features a whole floor of Furniture & Bedding products ranging from sofas, coffee tables, dining sets, home wares, outdoor furniture, home office, TV cabinets, recliners, rugs, as well as mattresses, bed frames, bedroom sets, kids bed frames and bedding accessories.

    Its second floor features home and kitchen appliances, audio visual, cameras, photocentre, computers, games hub, connected health and fitness products.

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  • Samsung Electronics expects record $12.8 bn Q3 operating profit

    Samsung Electronics expects record $12.8 bn Q3 operating profit

    The company estimated operating profits of $12.8 billion in the July-September period, an all-time record for quarterly profit. Samsung Electronics said Friday it expected profits to hit an all-time record in the third quarter to September as the South Korean IT giant enjoys booming semiconductor sales.

    The company estimated operating profits of 14.5 trillion won ($12.8 billion) in the July-September period, an all-time record for quarterly profit and nearly triple the 5.2 trillion won earned a year earlier.

    Sales are estimated to have surged 29.65 percent on-year to 62 trillion won.

    Samsung did not announce the performance estimates of each business division but its semiconductor business is widely believed to have contributed greatly to the record-beating report.

    The company is set to release its final earnings report later this month.

    Samsung has been seeking to move past a bribery scandal which saw the company’s de-facto head Lee Jae-Yong thrown into jail and overcome a damaging recall last year of its flagship Galaxy Note 7 smartphone over exploding batteries.

    Lee, who was found guilty in August of bribery, perjury and other charges relating to payments made by Samsung to ousted president Park Geun-Hye’s secret confidante Choi Soon-Sil, is appealing his five-year sentence and says he is innocent.

  • Consumers skeptical of iPhone X face recognition

    Consumers skeptical of iPhone X face recognition

    A new survey indicates that one of the defining functions of Apple’s new flagship iPhone X – the face recognition functionality – could struggle to gain traction with consumers.

    Juniper Research polled iOS users in the US, and found that over 40% consider themselves unlikely to use facial recognition as a payment security technology.

    Consumers in the US and UK instead showed a clear preference for fingerprint authentication and voice recognition as alternative biometric security methods, with 74% and 62% respectively indicating they are likely to use these technologies.

    The research also shows that the number of contactless payment users grew by only 2% year-on-year in the US, compared to 12% in the UK.

    Existing users of OEM contactless payment services (such as Apple, Samsung and Android Pay) expect to increase their usage, but only 39% of non-users in the US and 26% in the UK expect to start using mobile contactless payments.

    Major obstacles to adoption include ongoing security concerns, according to research author James Moar. Two thirds of non-users (32%) have concerns about the security of transactions, compared to just 14% of users. A similar proportion of mobile banking non-users compared to users have security concerns inhibiting adoption. But security concerns are overall starting to ease.

    “Transaction security is a key barrier for mobile financial services adoption,” Moar said. “Addressing these concerns will bring many consumers to the point where they will consider using such services.”

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  • Verdict for Samsung heir weighs on telecom giant

    Verdict for Samsung heir weighs on telecom giant

    Prosecutors have demanded a 12-year sentence for Samsung’s 49-year-old ‘crown prince.’ The heir to the Samsung empire faces the verdict in his corruption trial Friday, which threatens to leave the world’s biggest smartphone maker rudderless for more than a decade.

    Lee Jae-Yong, vice chairman of Samsung Electronics and the son of Samsung group chairman Lee Kun-Hee, has been groomed all his life to take over the giant conglomerate founded by his grandfather in 1938.

    It is by far the largest of the chaebols, the family-controlled firms that dominate Asia’s fourth-largest economy, which some South Koreans self-mockingly dub the “Republic of Samsung”.

    Its turnover is equivalent to a fifth of the national GDP and it has long had close, opaque connections with political authorities.

    But now prosecutors have demanded a 12-year sentence for Samsung’s 49-year-old “crown prince” if he is convicted of charges including bribery and embezzlement in connection with the corruption scandal that brought down president Park Geun-Hye.

    Park, dismissed from office in March after public fury, is on trial separately accused of offering policy favors to tycoons including Lee who enriched her secret confidante Choi Soon-Sil, with Samsung handing over around $40 million.

    Lee has been detained during his trial, and the prospect of his being imprisoned for years has sent shockwaves through Samsung, where the founding family’s rule has been taken for granted for decades.

    The Lee clan directly owns about five percent of Samsung Electronics shares, but maintains its grip on the wider group through a byzantine web of cross-ownership stakes involving dozens of companies.

    Although Samsung’s day-to-day business is maintained by the elite CEOs at each unit, analysts say they would be unwilling to make — and take responsibility for — costly decisions over large-scale acquisitions or investments without family approval.

    “In South Korea, such decisions are often endorsed by the patriarch of a ruling family,” said Chung Sun-Sup, the head of corporate analysis firm chaebul.com.

    Lee Jae-Yong’s sister Boo-Jin, who is in charge of the group’s fast-growing hotel business, was once touted as a potential stand-in.

    But many dismiss the possibility, saying she has few allies and little management experience at Samsung Electronics — the crown jewel of the group.

    Despite Lee’s absence Samsung Electronics has reported stellar profits in recent months, sending its share price soaring, thanks to booming demand for its memory chips used in computers, servers and mobile gadgets.

    Analysts say it is reaping the benefit of radical decisions made years ago under the senior Lee’s rule, including the construction of new chip factories that cost billions of dollars.

    “With so much uncertainty at its leadership, Samsung may move more slowly than before to make the kind of bold, large-scale investments that made it so successful today,” Chung told AFP.

    Future strategy

    Since the senior Lee was left bedridden by a heart attack in 2014, Samsung has stepped up attempts to streamline itself, selling off marginal or less profitable businesses, while also enhancing Lee Jae-Yong’s authority.

    Those efforts would be suspended if Lee receives a lengthy jail term, Chung said, which could force the group into “an unprecedented experiment” of operating without direct Lee family control.

    But Geoffrey Cain, the author of a forthcoming book on Samsung, pointed out Samsung Electronics had been able to make strategic moves despite Lee’s detention in custody.

    “The leader being in jail is a familiar story for chaebol groups, and one they can get around,” he said.

    “Samsung will not be doomed without Jay Lee. Even if he gets a prison sentence, Samsung will be just fine. It’s up to the specialists to make their own decisions.”

    After the scandal sparked nationwide calls to reform “corrupt” chaebols, Samsung earlier this year disbanded its Future Strategy Office — a small, secretive group of top company veterans who directly served the Lees — vowing to give the board of directors a bigger role in decision-making.

    Millions of dollars

    New President Moon Jae-In won a sweeping election victory in May with promises of weeding out deep-rooted, corrupt ties between chaebols and regulators.

    Prosecutors accuse Lee of seeking state approval for a controversial 2015 merger of two Samsung units seen as a key step to ensuring his accession.

    He pleaded not guilty, saying he was not involved in decisions over the donations and not even aware of Choi’s existence.

    During his trial, his lawyers and ex-members of the Future Strategy Office tried to portray him as an inexperienced, naive heir not even allowed to “meddle with” decisions made by the veteran executives chosen by his father.

    As a legal strategy it is undoubtedly embarrassing, but it remains to be seen whether the three judges hearing the case, in which four other top Samsung executives are also accused, are convinced.

    “If he is found innocent and walks away, it would be a huge setback against the court and the current administration,” said Shim Jung-Taik, an author of several books on Samsung and its history.

    He warned of “huge public outcry” in the event of an acquittal, telling AFP: “In South Korea, the Lee case is not just a legal case but a social and political one whose result is seen as a verdict on wider chaebol culture and corruption.”

  • Samsung Mobile Philippines takes nod to past

    Samsung Mobile Philippines takes nod to past

    In partnership with 8Telcom, Samsung Mobile Philippines has officially opened its second Samsung Experience Store, at Davao City’s Victoria Plaza Mall.

    Billed as the first redesigned concept store in the Philippines, it marks 8telcom’s 15th anniversary, with Samsung deciding to go back to where everything started – the first 8telcom multi-brand kiosk was established at Victoria Plaza.

    At a grand opening of the Samsung store, the first 50 customers each received a free headset, and a free Bluetooth speaker was given to buyers of five different phone models.

    Customers who pre-ordered the Samsung J7 Pro smartphone will also receive a free wireless speaker.

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  • Dick Smith sites prove hard to sell

    Dick Smith sites prove hard to sell

    Nearly half of all Dick Smith stores nationwide have been re-leased to a range of categories and big brands, however many of the smaller regional locations remain vacant, according to real estate firm, Colliers.

    Former Dick Smith stores in locations like Levin, Gisborne, Richmond and Wanganui are still empty.

    “Although the former Dick Smith’s stores are typically in the best retail locations in these markets, the issue is around the lack of demand from national brands to enter these smaller cities and towns,” said Leroy Wolland, Colliers national director of retail.

    Wolland anticipated these challenges for the smaller regional store locations earlier this year when the Dick Smith’s stores closed down.

    “The hesitancy for the bigger brands moving into these locations is around the lack of catchment size.”

    “So it’s likely these sites will be back-filled with local retailers as opposed to national branded retailers.

    “We are working on a few options for these locations.”

    Most of the Dick Smith’s stores in the major cities were leased to larger, high profile retailers.

    Wolland says Colliers has also completed deals with international retailers Witner Shoes and Footlocker who have snapped up ‘high street’ sites in Wellington and Auckland.

    “We have also leased a number of stores to new Australian pet retailer, Petstock.

    “The opportunity presented by the closure of the Dick Smith’s chain accelerated these brands’ rollout into New Zealand,” said Wolland.

    Colliers has also successfully leased stores around the country to homeware retailers Bed Bath & Beyond and Lighting Plus as well as to The Clearance Shed, Hot Spring Spas, Repco, Pricewise and NZ Uniforms.

    The Golf Warehouse, Curtain Studio, Citta Homewares and electronic retailers Jay Car, Noel Leeming and PB Tech have also taken over stores.

  • Chinese market no longer land of opportunity for Korean products

    Chinese market no longer land of opportunity for Korean products

    China’s consumer market that once offered vast opportunities for South Korean exporters has become less penetrable as Chinese firms make goods that compete with imports, industry data showed on July 14th.

    Samsung Electronics, which in 2012 ousted Apple Inc. to hold the top market share for smartphones in China, fell to eighth place in the first quarter of this year. Samsung’s market share in handsets hit 17.7 percent in 2012. It dropped to 4.9 percent in 2016. In the first quarter this year, its market share was a marginal 3.1 percent.

    China’s own brand Huawei raised its market portion from 9.9 percent to 18.9 percent over the past five years. Another local firm OPPO, who had no presence in 2012, soared to grab 18.7 percent during the period. Together with Vivo, the three are dominating the Chinese smartphone market.

    Industry officials say that data indicates THAAD may not be the only cause of falling South Korean exports to China as firms there are quickly catching up in technology and no longer relying on foreign products.

    South Korea’s auto exporters have also been nudged out by Chinese companies, data showed. Hyundai Motor and its sister firm Kia Motors reported their market share in China had been cut in half compared with five years ago.

    The carmakers said their numbers fell from 8.6 percent to 3.8 percent. They were routed by Chinese local labels, which claimed 46.1 percent of the market, followed by European (21.4 percent) and Japanese (17.6 percent) automakers.

  • Omnichannel retailing to deliver market win

    Omnichannel retailing to deliver market win

    The omnichannel model has become a new weapon in the race to maintain and expand market share in the electronics retail industry.

    The coveted Top 3

    A latecomer taking on established competitors, FPT Shop only started to strengthen its e-commerce channel in 2014. Within a single year, revenue from this business segment was only VND318 billion out of the total VND5.226 trillion ($13.98 million out of $229.91 million). FPT Shop’s website’s traffic reached a modest 100,000 visitors per day.

    In 2015, the firm’s e-commerce revenue posted VND568 billion ($24.98 million) and traffic doubled. In 2016, revenue from online sales grew by over 200 per cent, registering VND1.2 trillion ($52.79 million) and contributing approximately 10 per cent of its total revenue. Traffic was 800,000 visitors per day.

    Although FPT Shop’s e-commerce revenue in 2016 was only half of its largest competitor The Gioi Di Dong, this is considered an optimistic sign of greater opportunities as FPT Shop enters the potential e-commerce playground.

    According to Ngo Quoc Bao, director of business development of FPT Retail, FPT Shop has set a more ambitious target. “E-commerce revenue will double in 2017, crossing the VND2 trillion ($87.98 million) threshold,” said Bao. Such acceleration of growth shows FPT Shop’s intention toward professional omnichannel retailing. “We will continue the strong development of offline and online channels and the strategic partnership with companies like Google and Facebook to boost customer outreach,” remarked Bao.

    In order to achieve this, FPT Shop implemented comprehensive HR restructuring at the e-Commerce Centre from upper management to business strategy. While it used to open 5-7 stores a month, now the rate is only 1-2 stores per month, with no plans for further physical store expansion in the near future. Its current store count is 430.

    According to Bao, as FPT Shop entered the online arena later than its competitors, it has to reach one million customers this year. To achieve this, FPT Shop must boost traffic, optimise user experience to increase returning visitors, ensure confidentiality, convenience, and timeliness in online payments.

    The Gioi Di Dong (MWG) is arguably the first entrant to the online retail realm. This major name is in possession of the largest market share, with 10 per cent, thanks to a formidable online presence that is considered superior to that of Lazada (mostly owned by Alibaba) and Zalora (wholly owned by Nguyen Kim and Central Group).

    According to market research firm Euromonitor International, although market shares fluctuate year to year, MWG continues asserting its dominance among online retailers since 2011. MWG determined hefty targets for online retail as revenue from this source is set to double over-year to VND6.65 trillion ($292.55 million). The company’s total supermarket count will reach 1,207, of which thegioididong.com accounts for 951, Dien may XANH 256 for supermarkets and 40 for stores. Along with all this, Vuivui.com, a dedicated e-commerce site, will play a crucial role in the company’s strategy.

    Nguyen Duc Tai, president of MWG, commented that middle and high-school students tend to make more and more online purchases. Vuivui.com is the company’s investment for this future consumer base. The platform may even become MWG’s growth driver by 2020. “But for now, physical stores remain MWG’s chief money maker,” said Tai.

    Talks of the race to expand among the likes of FPT Shop and MWG cannot leave out Vien Thong A, a name ringing fewer bells, who is currently ranked third in the online retail arena. This retailer had an impressive year in 2016, where it opened 63 new supermarkets nationwide, boosting total count to nearly 300. Additionally, the retailer’s revenue went up by 30 per cent on-year.

    Besides tackling the coverage target and growth at least of 30 per cent, this year Vien Thong A will expand its online sales activities, which in 2016 generated only 5 per cent of the revenue made through traditional channels.

    Hoang Ngoc Vy, CEO of Vien Thong A, said the company is looking to expand its B2B online business in order to meet the ever-increasing demand. “The development of omnichannel tactics to offer services regardless of location and timing is our top priority,” remarked Vy.

    In order to jumpstart this business segment, Vien Thong A has to meticulously identify a strategic investor as its partner in this race.

    A game of speed

    According to Euromonitor International, by 2020, online electronics retail will grow at 30.9 per cent CAGR, reaching VND20.985 trillion ($923.18 million). Meanwhile, purchasing behaviour is changing, shifting to more time spent online, leading the offline channel to saturation, with increasingly limited room for growth.

    In reality, omnichannel retailing has been steadily gaining ground for the past three years in Vietnam as mini-scale online stores started mushrooming on Facebook with numerous online sales tactics.

    Especially, Zalo (VNG) launched Zalo Shop to provide independent online merchants with a direct platform to 60 million customers without acquiring technical capabilities. Zalo users can conveniently “browse” thousands of stores on the uniform interface of Zalo Shop and easily make purchases without searching on Facebook or Google. Boasting these advantages, the online channel, more than ever before, has become considerably lucrative.

    According to statistics by Google, Vietnam is second in the world in terms of the number of online retail merchants. Whether this form of retail can grow sustainably remains, however, a question as customers are hesitant to accept/trust these independent small-scale businesses.

    Such prospects push retailers towards change. They admit the never-before-seen potential of omnichannel in awakening the market and capturing new customer segments.

    Bao commented that FPT Shop must expand its coverage and get ahead of market demand. However the Vietnamese consumers are naturally sceptical. Online buyers would visit offline stores to browse the merchandise, compare the products and prices. Therefore, it is advisable that companies stay mindful of their physical chains.

    Logistics above all

    “Never coerce consumers to online channels, since physical visits are conducive to unintended additional purchases. It depends on geographic and taste factors that enterprises coordinate their channels, hence enhancing brand recognition,” said Bao.

    In the race of omnichannel retailing, the essential survival tip is understanding, satisfying, and building trust with customers. To achieve this, retailers are responsible for guaranteeing the authenticity, quality, and timeliness of merchandise. Logistics, therefore, should be an investment priority.

    The Gioi Di Dong used to outsource its logistics but has since developed its own delivery capabilities. FPT Shop utilises its own store staff for delivery.

    “In that way, our delivery staff can directly consult the customers on product use and ensure our reputation,” commented Bao.

    Regarding logistics, Luong Duy Hoai, CEO of Giao hang nhanh (GHN) said, in the future, a product from abroad can easily reach Vietnamese consumers. The same goes for Vietnamese goods sold to other countries.

    Therefore, it is no longer a matter of speed but of agility to comprehend and lead the industry landscape by market shares. The challenge for modern retailing is the shipment of million, even tens of millions, of orders on a daily basis. The ultimate success factor lies in a delivery network that can address the complexities of increasingly customised demands. It is up to each retailer to rapidly transform its model according to the current technological trends.

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