In difficult economic times, consumer demand for non-essential goods has also decreased significantly. This has greatly affected the operation of home appliance retail chains. It is forecasted that it will not be easy for home appliance chains to return to their previous growth if the macroeconomic situation does not improve.
The purchasing power of the home appliance industry is falling more than expected. In difficult times, customers often consider purchasing new goods to replace old ones. Enterprises in the field of home appliances are currently having to lower the prices of many products to reduce their inventory, but they cannot solve the issue.
At the moment, there are concerns about the risk of inflation, economic recession affecting purchasing power, increasing input costs of some items causing price increases, all of which are affecting the purchasing power of consumers and causing many difficulties for home appliance chains. Facing a difficult market, home appliance chains are having to compete fiercely to expand their scale and gain market share.
Now is the time when the cheap war breaks out. Home appliance retail chains are trying to reduce product lines in order to compete for market share and reduce inventory. Many brands are also competing fiercely on selling prices with discounts, promotions, and discounts from direct purchase to online purchase in order to win customers.
Dien May Xanh
The Dien May Xanh Supermarket chain of Mobile World Investment Joint Stock Company opened its first supermarket in December 2010, originally named dienmay.com. In May 2015, it was officially renamed Dien May Xanh Supermarket.
In June 2020, the Dien May Xanh Supermini (DMS) model was born, with each store having an area of 120 to 150m2 and providing about 60% of the list of basic phone and electronic products. This model is aimed at serving customers in rural areas, going deep into districts and communes where there are no modern electronics stores.
Up to now, the Dien May Xanh retail chain has expanded to more than 2,000 home appliance centers in 63 provinces and cities across the country, including more than 1,000 supermini model stores. In 2022, this home appliance center chain officially entered the Indonesian home appliance retail market with 5 Erablue stores. With the number one market share in this field, they have affirmed their leading position in the industry.
Despite being in a difficult economic period, Dien May Xanh's revenue from 2020 to 2022 has still been growing steadily. In 2022, this home appliance chain recorded a revenue of more than 68,000 VND billion, an increase of 8% compared to 2021. Dien May Xanh also accounted for more than 51% of The Gioi Di Company's chain revenue structure.
On May 21, 2001, Cao Phong Company Limited was established, associated with the brand name Cho Lon Electronics - Furniture Supermarket. The birth of Cho Lon Furniture - Electronics Supermarket marked a big step forward in the Vietnamese home appliance market, being a pioneer in the field of retailing home appliances and furniture in Vietnam.
Dien May Cho Lon is currently a home appliance chain that can still fiercely compete with Dien May Xanh. Currently, Cho Lon has developed nearly 100 stores in the South and Central regions, and in the near future there is a plan to expand to the North in the future.
The revenue of this home appliance chain is still maintaining a fairly stable growth rate. Specifically, in 2022, Cho Lon's recorded revenue reached more than 21,000 VND billion, an increase of 5,000 VND billion compared to the previous year. Furthermore, the profit of Cho Lon in the last three years has also been on an upward trend. In 2022, Cho Lon recorded a profit of more than 771 VND billion.
MediaMart Vietnam Joint Stock Company, which owns a chain of more than 350 home appliance shops nationwide. Currently MediaMart is the leading unit in the distribution and retail market of home appliances and technology in the North.
Due to decreasing consumer purchasing power, the business situation of the MediaMart retail chain has not changed much in recent years. The revenue of this home appliance chain has remained around 8,500 VND billion in recent years. Despite no growth in revenue, MediaMart's profit has still tended to increase year by year. In 2022, this home appliance chain recorded a profit of more than 60 VND billion.
In 1996, Nguyen Kim opened the first store and it was the first place in Ho Chi Minh City to trade home appliance products under the modern retail model. As a pioneer in the home appliance market, Nguyen Kim was taken aback when The Gioi Di Dong quickly expanded its electronics business with the new brand Dien May Xanh. The position of Nguyen Kim has also been gradually replaced by other competitors.
Once a leader in home appliance retail chains, now Nguyen Kim has slowed down considerably. The revenue of this chain of stores in 2021 is just over 6,000 VND billion, down more than 1,000 VND billion compared to the previous year. Not only that, in recent years, Nguyen Kim has been suffering a huge loss of hundreds of billions of dong.
HC belongs to VHC Trading Company limited, has been on the market since 2006 and has focused on developing in the northern market. HC is one of the first home appliance chains established in Hanoi, specializing in trading electronics, refrigeration, home appliances, information technology, phones, and digital entertainment equipment.
HC is considered to be the largest electronics supermarket system in Vietnam, with a display floor area of 1000-4000m2 and a full system of warehouses, auxiliary logistics, and distribution of more than 20,000 electronic products. With more than 40 branches across provinces and an online business model with strong coverage on electronic channels, HC has become one of the leading prestigious home appliance chains, trusted and chosen by millions of consumers.
The revenue of the HC electronics chain in recent years has also been trending up. In 2022, HC achieved a revenue of 7,400 VND billion, a slight increase of nearly 200 billion compared to the previous year. After profit was reduced quite a bit in 2021, but by 2022 HC's profit had a good change, doubling compared to 2021.
Pico home appliance chain was established in July 2007 at 76 Nguyen Trai, Hanoi, marking a big change in the shopping habits of people in the capital. Before Dien May Xanh was born, consumers in the Capital and the North were familiar with this cult brand.
Under the impact of the economic crisis as well as the tightening of people's spending, it greatly affected the revenue of the Pico home appliance chain. The revenue of this home appliance chain has been decreasing over the years; in 2022, it was only about more than 1,000 VND billion. After suffering a loss of more than 30 VND billion in 2020, Pico was able to earn a profit in the following years, but not a large one.
Thien Nam Hoa
Thien Nam Hoa Service and Trading Joint Stock Company (formerly known as Thien Nam Hoa Trading and Service Company Limited) was officially established and put into operation on November 24, 2001, with the main business line being home appliances and Furniture. Up to now, Thien Nam Hoa has developed into a chain of Home appliance - Furniture centers with the scale of 10 large and comfortable centers.
Recently, Thien Nam Hoa marked the strategy of expanding their market distribution channel by bringing their electrical products to the retail supermarket Co.opXtra Linh Trung. Products distributed by Thien Nam Hoa will be available at the Co.opXtra Linh Trung supermarket, which has a sales area of and service up to 15,000 m2, making it convenient for customers to go to the supermarket to buy essential items, as well as experience shopping for home appliance products, refrigeration from Thien Nam Hoa's home appliance chain.
The fierce competition in the home appliance market has made Thien Nam Hoa quite difficult in this period. The revenue of this home appliance chain only reached 476 VND billion, although a slight increase compared to 2021, compared it was still a significant decrease to 2020. Not only low but over the years, The revenue of Thien Nam Hoa has suffered losses of tens of VND billions, and sometimes even hundreds of VND billions.
On 11/12/2010, ECO-MART was established at KM 13, National Highway 3, Dong Anh Town, Dong Anh District, Hanoi City. ECO-MART is the first home appliance center in Dong Anh, with a total area of over 2,000m2 and a frontage of more than 30m. It specializes in providing products such as electronics, refrigeration, home appliances, laptops, mobile phones, and many other useful items for customers to choose from.
Although it has been operating in the home appliance industry for more than 10 years, the scale of this retail chain is still quite small, and its revenue is not too high. In 2022, ECO-MART will reach a revenue of 244 VND billion, a slight increase compared to 2021. In recent years, the ECO-MART retail chain has still made a profit, but this number has been on a decreasing trend. By 2022, the after-tax profit of this home appliance retail chain is 146 VND million.
During the economic downturn, the decrease in purchasing power made it difficult for businesses. Competition in this era is not easy. To return quickly, businesses need an optimal competitive strategy with the main products of the market. If successful, they will have the opportunity to gain a large market share when the market recovers.
Source: Vietdata's 2022 home appliances industry report