Consumers have it good as electronics prices crash

The global economic slump has forced producers and distributors of electrical and electronic goods to cut prices, offering consumers a windfall.

But belt-tightening potential buyers have been buying less and less, retailers said, adding the little they buy has been in the low-priced segment.

Since the beginning of this month, retailers in Ho Chi Minh City and Hanoi have joined hands with producers to cut prices by 10-40 percent.

Liquid crystal display (LCD) and Plasma television sets, just two years ago a luxury product, have now come within the reach of many. The prices of the most popular 32-inch LCD TVs are now between VND6.9 million (US$406) and 7.9 million ($465).

Robert Vu, marketing director of Samsung Vietnam Electronics Company, said the LCD TV prices in Vietnam are 15-20 percent lower than in other regional countries.

Digital cameras, recorders, refrigerators and washing machines have also become 10 percent cheaper since last month.

Vu said the price cut is partly due to the rapid technological evolution, which quickly makes products outdated.

But Mai Duy Bao, marketing director at Philips Vietnam, said the main reason for the falling prices is the pressure on revenues.

“Firms are under pressure to achieve the year’s revenue targets,” he said.

Newswire VietnamNet said in a report last week that some producers and importers of LCD TVs substantially increased their stocks this year based on the good sales last year.

But with inflation taking a toll this year, sales have halved, leaving huge stocks unsold and producers with no choice but to slash prices.

Retailers have helped slash prices by cutting expenses on advertising and marketing.

“Producers and retailers have cut costs as much as possible and have had to forgo profits to keep customers,” Nguyen Minh Thu, marketing and trade director of Thien Hoa retail chain, said.

The VietnamNet report quoted Ngo Thanh Dat, marketing director of the Hanoi-based Pico Plaza retailing center, as saying prices would go down even further from next month as retailers launch intensive promotion campaigns for Tet.

Dat expected the campaigns to focus on price cuts rather than offer gifts or raffle tickets to attract customers.

But for the moment sales remain sluggish, retailers said. Hoang Ngoc Vy, director of Vien Thong A mobile phone chain, said her company’s sales have halved this year.

Besides their fear of continuing inflation and the risk of economic slowdown, many consumers are also expecting prices to fall further, Bui Minh Thu of Gia Thanh retailing center in HCMC said.

Under Vietnam’s commitments to the World Trade Organization, it is set to cut import duties substantially on electrical, electronic, telecom and information technology products in the new year.

Three million or less

In a report last month, market research firm GfK Vietnam revised its forecast of consumer durable sales this year to $3.9 billion, down from its June forecast of $4.07 billion.

Tran Khoa Van, GfK’s country manager, said high inflation has hit purchasing power as consumers grapple with the high costs of food, clothes, travel and entertainment.

Retailers said the last quarter is set to see mostly sales of low-cost electrical and electronic goods.

Most customers buy low-cost cathode-ray-tube TVs, washing machines, fans and irons, a salesperson at Cho Lon supermarket in District 5 said.

Major retailers said goods priced at under VND3 million accounted for up to 75 percent of total sales.

Source: TN, Agencies