Economic woe casts shadow on electrical appliance retailers

Sales of many electrical appliance stores in town have dramatically plummeted since consumers cut spending during economic turmoil.
“The consumption of hi-tech products has started to slow down since April this year,” said Ho Minh Tri of the electrical appliance trader Petrosetco Distributions.

Vo Hoang Quan, director of Hanoi-based FPT Trading, aligned with Tri and warned that “the slowdown will be worse this month”. However, she expects the sales will rally in August.

Nguyen Canh Hien of the electrical appliance retailer Back Khoa Computer said declining sales combined with high interest rate this year made his firm hesitate to stock products.

“We switched to restock weekly, instead of monthly,” Hien said.

Many retailers predict that consumption of computers will remain significantly weak until September, while electrical appliance demand is expected to make u-turn in November.

Electrical appliance stores in many districts in Ho Chi Minh City, including Go Vap and Tan Binh, have suffered quiet trading even at weekend for months.

Local electronics retailer WonderBuy has declared bankruptcy after only one year of operations, citing a loss of VND52 billion (US$2.6 million) as the primary reason, according to Thanh Nien Newspaper.

The retailer filed for bankruptcy on May 24, the first major electronics store in HCMC to do so.

The store, located in District 1, opened in June last month, selling more than 70,000 products.

Figures from the General Statistics Office show the import turnover of electrical appliance increased 23.2 percent year-on-year to $2.7 billion in the first six months of the year.

Vietnam’s retail sales grew at their slowest pace in May as consumers cut back on spending amid rising inflation.

Retail sales only reached VND156 trillion in May, up 0.68 percent from April, which was the smallest monthly increase in 2011, official statistics showed. – SGGP

Tags: Vietnam electronics market