Business are looking to piggyback on the success of supermarkets to bring their products to new customers.
In the last three years, alongside setting up new independent stores, home appliance retailers have been trying to develop the ‘shop-in-shop’ scheme in an effort to popularize their brands. This means working with supermarket chains such as Maximark, Big C or Metro.
According to Huynh Viet Thuong, chairman of mobile phone distributor Vien Thong A, they have 19 shops in Big C and Co-op Mart chains and plans to set up shops in the Lottemart chain in January 2010.
Mobile phone distribution chain, Gioi Di Dong has also set up five shops in the Metro network.
Dinh Anh Huan, business director of The Gioi Di Dong, said the “shop-in-shop” scheme will help home appliance retailers cut down expenses on retail premises and staff. However, generally they do not enjoy high revenue as they mainly provide parts and accessories and the products of low value
Cho Lon also has four shops at Co-op Mart and Maximark. Lien An Thach, business director of Cho Lon believes it is the right decision to set up shops in big supermarket chains. “The prestige of the big supermarkets has helped make our brand better known,” he said.
Huan from The Gioi Di Dong said The Gioi Di Dong is learning about business policies applied by big trade centres such as Parkson, Diamond Plaza and Kumho. However, he says that domestic mobile phones or home appliance retailers still find it hard to make a profit due to high premises rent and the centers’ policy on sharing profits based on turnover.
Supermarkets powerful only in urban areas
According to mobile phone traders, in 2009, selling mobile phones in supermarkets brought in up to 40 percent of total turnover.
Meanwhile, turnover brought by information technology product in supermarkets brought in 10 percent of total turnover.
Ngo Nguyen Kha, deputy director of P&T Mobile, said supermarkets are powerful in urban areas, while the markets in small localities are still controlled by small shops.
To date, the market for home appliance, information technology and digital products is still controlled by domestic retailers. However retailers from Indonesia and the Philippines have started to show interest.