The Declining Trend of Electronics Store in Vietnam

17 Jan 2025

By: B&Company

In recent years, Vietnam has witnessed a notable decline in the number of physical electronics retail stores. This trend marks a stark contrast to the rapid expansion of the market that was seen in the years leading up to the mid-2010s[1]. The main driver behind this shift is the rise of e-commerce, coupled with the fast-paced digital transformation that is changing consumer behaviors. Online shopping, which offers convenience and competitive pricing, has become increasingly popular, reducing the demand for traditional brick-and-mortar electronics stores.

Market Trends: Declining Revenue and Store Closures

Vietnam’s electronics retail sector has seen a significant downturn in revenue, particularly in 2023. Large electronics supermarket chains such as Dien May Xanh, Media Mart, Nguyen Kim, etc. Which once dominated the market, have reported noticeable drops in sales. For instance, Dien May Xanh reported a 25% drop in revenue compared to 2022[2].

Total Revenue of Some Electronic Stores[3] (2020 – 2023)

Source: B&Company Complication

Moreover, all of these stores have been forced to close multiple branches due to continued financial losses. The expansion that was once the hallmark of the industry has reversed in recent years, with many companies scaling back their physical presence.

Some Electronic Stores Closures in 2023

Source: B&Company Complication

Shift in Consumer Behavior: The Rise of Online Shopping

One of the primary factors contributing to the decline of physical electronics stores is the increasing preference for online shopping. More than half of Vietnam population, around 57 million people made online purchase in 2022 because of its convenience, easy to buy and the variety of products that physical stores can hardly compete[4]. Moreover, absent of well-known electronics stores in many localities outside major urban areas such as Hanoi, Ho Chi Minh City, and Da Nang has further pushed Vietnamese consumers toward online shopping.

Another key advantage of online shopping is the often-lower prices offered by e-commerce platforms. Consumers can easily compare prices across various online retailers, finding the best deals with discounts, sales, and special promotions. Many online platforms, such as Shopee, Lazada, and Tiki, offer frequent flash sales varying from 10% to 50% discount[5]. These events have become a staple of e-commerce in Vietnam, further eroding the demand for traditional in-store shopping.

Some discounted products on e-commerce platforms

Source: Shopee and Lazada E-commerce Platform

In addition, with online shopping, customers can read reviews from other buyers, watch unboxing videos, and consult product ratings before making a purchase decision. This level of transparency is not typically available in physical stores, where consumers often rely on sales staff for information. As a result, consumers feel more confident purchasing electronics online, knowing that they can access detailed product information and feedback from other customers.

The Growth of E-commerce and Social Media in Vietnam

The rapid growth of e-commerce in Vietnam has significantly transformed how electronics retailers sell and promote their products. Platforms like Shopee, Lazada, Tiki, and Sendo, even though social media like TikTok or Facebook have become essential sales channels, offering wide-reaching access to consumers, especially in areas where physical stores are less prevalent. Specifically, in 2023, the sales of home electronics reached 41 million USD, ranking sixth among the highest-grossing product categories[6]. Not only do these platforms generate substantial revenue, but also enable retailers to sell electronics more cost-effectively, reducing the need for expensive retail spaces and operating expenses[7].

A particularly notable trend in Vietnam is the use of KOLs – celebrities and influencers – who host live-streaming sessions to promote electronics products. This trend in selling is expected to boost 20% of retailer’s total revenue by 2026[8]. These live-streaming events often feature exclusive, time-limited deals and are broadcasted on e-commerce platforms or social media channels like Facebook (32%), Shopee (31%) and TikTok (17%)[9]. Through live-streaming, KOLs engage directly with viewers, offer discounts, attract large audiences and encourage impulse purchases. To quickly capitalize on this trend, Dien May Xanh, Media Mart, and FPT have also started inviting famous personalities to host their own live-streaming sessions, boosting both brand recognition and sales. For instance, in 2023, Dien May Xanh hosted a one-hour live-stream event that garnered over 17,000 views and generated 367 orders, totaling 4.7 billion VND in sales[10].

Conclusion

The decline in physical electronics stores in Vietnam is a direct result of the growing dominance of e-commerce platforms and the changing preferences of consumers. The convenience, competitive pricing, and ability to compare products and reviews online have made shopping more accessible and attractive to Vietnamese consumers. With the operation cost rising every day and the trend of live streaming sales, electronics retail in Vietnam need to adapt and evolve in order to remain relevant. Many companies are already enhancing their online presence, hosting live streaming sessions with the collaboration of KOL, and embracing the digital transformation to stay competitive in this rapidly changing market.

[1] Dantri Newspaper (2021). The Frenzied Expansion of Electronics Stores <Assess>

[2] Mobile World Invesment (2023). Dien May Xanh 2023 Report <Assess>

[3] Electronic Stores including: Dien May Xanh, Media Mart and Nguyen Kim

[4] VnExpress (2023). Vietnamese Online Shopping Trend <Assess>

[5] TuoiTreNews (2023). E-commerce Surged in Vietnam, Many Discounts Event in the End of Year <Assess>

[6] Dan Viet Electronic Newspaper (2024).

[7] https://nld.com.vn/dien-may-cong-nghe-song-duoc-nho-ban-hang-online-196240615205344374.htm

[8] https://vneconomy.vn/bung-no-xu-huong-tieu-dung-livestream.htm

[9] https://viracresearch.com/livestream-ban-hang-bung-no-song-tang-quan-ly/

[10] https://theleader.vn/tu-phien-livestream-75-ty-dong-den-su-chuyen-minh-cua-the-gioi-di-dong-d5474.html

B&Company, Inc.

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