WonderBuy closure reveals challenges faced by home appliances stores

The local electronic market faces a grim future after WonderBuy, a store of electronic and home appliances in HCMC’s District 1, announced bankruptcy with losses of VND52 billion after nearly a year of operation.

Enterprises in the industry are afraid they will get into a life-and-death struggle as the electronics market remains stagnate due to economic difficulties.

A representative of a cooling appliance importer from ASEAN countries says local retailers are suffering a very difficult time right now as demand for the products has fallen by 60%. Most retailers have sharply reduced orders from importers since the start of the year.

Customers of electronics stores, of whom 30% are project investors and 70% are individual buyers, have tightened their belts given the gloomy economic situation, the representative says.

Weather hasn’t been a friend to electronic stores this year. “Importers have predicted that Vietnamese people in the hot weather are generous enough to buy many cooling appliances despite economic difficulties. But, we are wrong. The weather is not too hot and the economy does have big trouble,” he adds.

Dinh Anh Huan, general director of dienmay.com website, admits customer demand had dropped strongly since Tet (lunar new year) holiday, resulting in a large stockpile for many agents. Huan also said there has been a tough competition on the market as more and more stores have opened everywhere.

“HCMC-based enterprises have opened stores in Hanoi, while those in the capital city have headed to the South. They give discounts and promotions to lure customers and take back a modest profit,” Huan says.

A representative of De Nhat Phan Khang supermarket chain also told the Daily that the stores still suffer from high operation costs as electricity and labor costs are much higher than a year ago.

Experts in the industry agree that some brands will disappear or scale down business after WonderBuy’s collapse.

Small stores and enterprises are most vulnerable to the selection as they, with modest sales, cannot establish close relations with trading companies to offer discounts or promotions. “The programs are prioritized to agents with big sales,” says the representative of the importer.

Bui Tan Cuong from Thien Hoa supermarket system told the Daily that this year will be the time to challenge enterprises in the sector and those with poor services will have to go. – SGT

Tags: home appliances stores, WonderBuy