HANOI: Mobile phone and laptop distributors and retailers reported good revenue and profit in July, showing that the business activity of companies operating in this field is on the rebound from the Covid-19 pandemic.
However, analysts said that the increase in inflation will negatively affect consumer spending, and the sales growth of distribution and retail businesses of phone and laptop products may not be as high as per initial expectations.
According to surveys by Bao Viet Securities JSC (BVSC), leaders of Digital World JSC (DGW) and PetroVietnam General Services JSC Corp (PET) – the two big laptop and mobile phone distributors in Vietnam, they all saw signs of recovery in the demand for laptops and mobile phones in July.
The revenue from laptop sales of DGW in the month increased by 5% over the same period last year, and is forecast to continue recovering in August and September. Meanwhile, mobile phone revenue surged 105% year-on-year as consumption last year was heavily affected by pandemic-induced restrictions.
PET also confirmed the same trend although it has not yet released its preliminary business data for July.
According to BVSC’s estimates, mobile phone revenue in the second quarter of 2022 in Vietnam increased by 15.2% year-on-year, reaching 26.8 trillion dong (RM5.14bil).
Vietnam’s mobile phone revenue is estimated to grow 13.4% year-on-year in the first half of 2022 to 57.9 trillion dong (RM11bil).
However, according to SSI Securities JSC (SSI), inflation has affected purchasing power, forcing consumers to cut spending on non-essential items from the second quarter of 2022.
SSI forecasts that big companies will gain more market share thanks to their strong bargaining power with suppliers, allowing them to mitigate the impact of the higher cost of goods and thereby offer more discounts to customers in the context of inflationary pressure.
After the sharp increase in the first quarter of 2022, laptop sales in the second quarter of 2022 weakened due to a decline in demand.
The revenue of Digital World Joint Stock Company in the second quarter reached 1.13 trillion dong (RM216mil), down 15% over the same period last year and down 49.8% compared to the first quarter of 2022.
PET reported revenue in the second quarter of 2022 reached only 434 billion dong (RM83mil), down 51.9% over the same period last year and down 68.4% compared to the first quarter.
Laptop sales in the second quarter of FPT Digital Retail JSC (FPT) decreased by 0.9% over the same period last year to 879 billion (RM167.6mil). This number also decreased by 38.1% compared to the first quarter of 2022.
Profit of DGW peaked in the fourth quarter of 2021 thanks to unusually high laptop sales.
In 2023, corporate profits may still increase due to more contributions from newly signed contracts and revenue from existing contracts may still gain.
The profit of FPT also peaked in the fourth quarter of 2021, thanks to unusually high revenue from notebook computers, hence fourth quarter profit of 2022 may decline from last year’s high.
Businesses can still see increased profits in 2023 thanks to increased market share in the information and communication technology retail industry. Mobile World Investment JSC can also see increased profits thanks to increasing market share in information technology and consumer electronics.
On the stock market, along with business results dropping in the first half of the year and the decline of the stock market, shares in the retail distribution of phones and laptops also fell deeply. — Viet Nam News/ANN
