Why is Mobile World sponsoring but the low-cost phone chain is still dying?

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2021-03-24 19:19:39

From A Teo Phone to Super Cheap Phone

In early September 2019, Chairman of Mobile World Investment Joint Stock Company (General Director) Nguyen Duc Tai participated in a seminar on major governance in Hanoi. On the sidelines of this seminar, he openly shared about the business story at the CEO, including the story of the birth of a new chain at that time – Super Cheap Phone.

I believe each person has a historical period, and the historical stage that I build can say that it is over. The reality is now proving that the next ones have done better. Look at the growth of mobile phone industry of mobile phone companies, is it better than last year? It was by Mr. Understands, not by me. If I stayed, I guess there was a string of “super cheap phones” involved.

It should be recognized that the customer always has two groups, one interested in service, one interested in price. So we did very well in the service segment, ie the customers who care about the service, other than the price, the TGDD has already served; But the other group was doing really badly, ignoring them.

A few years ago, CEO of General Director had an intention to build a chain that we often call “A Teo phone”, not “super cheap phone”. But the two previous CEOs, Mr. Tai and Mr. Doanh, did not do anything, the intention to exchange with each other was already there, but none of them really stood up to do anything.

That day came to the hands of Mr. Understand Me, he Understands I said that you keep saying that you won’t do it, then let me do it. If he was young, he made such a fuss (laughs).

  Why is Mobile World sponsoring but the low-cost phone chain is still dying?  - Photo 2.

About 1 month earlier (August 8, 2019), MWG launched a new brand: Super Cheap Phone, the domain name is dienthoaisieure.com. The new chain of stores will follow a cost-cutting strategy, mainly targeting the people living around the store.

This chain of TGDD is expected to attack directly on small mobile phone stores in terms of both strategy and scale. The expectation of Mr. Tai and management is to increase revenue by “Selling items that have never been sold, and reaching a group of customers who have never approached,” with a strategy that is completely different from Thegioididong chain. com:

– With the same model but at Super Cheap Phone, it will be up to 10% cheaper than “brother” Thegioididong.com.

– This chain will only sell models priced at around VND 8 million or less.

– Each shop will have only 2 consultants, no seating furniture, no wifi service, and even no parking security.

Although there is a website, it is only for introduction, not selling online, because the strategy is very clear about customers who are residents near the store.

General Director of General Director Tran Kinh Doanh at that time once shared about the vision of the new phone chain: “The restaurant sells everything from chicken porridge, noodle soup, noodle soup, cheap noodle soup, even though it is difficult to have a bowl of vermicelli or delicious noodle with a luxury restaurant, only selling one thing, but there will still be customers choosing because for them price is important“.

Timeless Heaven, Location not benefit, Human is not harmonious?

In February 2020, CEO of General Director said that Super Cheap Phone store has average revenue of 300 million VND / month, reaching break-even level but not yet profitable because of low gross profit margin. A representative of this company said that the Super Cheap Phone chain is closed to move to a new model but has not disclosed specific about this model.

Website dienthoaisieure.com stopped working from June 29, 2020. Along with that, stores of Super Cheap Phone chain also closed one after another.

Why was carefully prepared, with the maximum support from TGDD, but after less than 1 year, Super Cheap Phone chain quietly withdrew from the market.

First of all, it is necessary to talk about the “natural advantage” factor: the context of the advent of Super Cheap Phones is somewhat disadvantageous.

In early 2020, the economy in general and the retail industry are under great pressure from the Covid-19 influence. When the store reached 300 million dong / month of sales, just enough to break even, Covid arrived.

April 2020 was the month when MWG’s parent company was heavily influenced by the closure in accordance with the policy of extending the outbreak in Vietnam. With the temporary closure of 600 telephone and electronics stores, TGDD’s April revenue decreased by 14% over the same period in 2019, reaching VND 7,830 billion. In which, the total revenue of the two chains Thegioididong.com and Dien May Xanh decreased by nearly 30%.

The social disruption and consumer anxiety have affected TGDD’s pets, it is hard to avoid the fact that the young “child” like Super Cheap Phone is almost stripped of “. oxygen “before big.

  Why is Mobile World sponsoring but the low-cost phone chain is still dying?  Photo 3.

In fact, the piece of cake that Cheap Phones wants to get is not easy and delicious. Mr. Doan Van Hieu said: “50% market share of mobile phones belongs to MWG, 25-30% belongs to other big chains and about 20% belongs to traditional stores, outside households, estimated at 6,000-7,000 stores. The mobile phone industry is forecasted to decline, but MWG’s market share just needs to increase a few percent since the market share of traditional stores is already very large.

It is impossible not to relate the rapid failure of Super Cheap Phones also to the will of the leadership. Obviously, this project is not a project too enthusiastic, not born because of the urgent need of Mr. Nguyen Duc Tai, Mr. Tran Kinh Doanh or Mr. Doan Van Hieu Em – the highest-level brains in CEO.

Recalling Mr. Nguyen Duc Tai’s sharing partly shows certain hesitation. Mr. Tai himself admitted himself and Mr. Doanh did not “blood fire” to implement this project. “Mr. Tai and Mr. Doanh Did not do anything, intentions to exchange with each other already lies there, but no real man stood up to do “. The re-execution of this project contradicts the usual drastic character of this entrepreneur. Even when a new chain was born, it was only because Mr. Hieu Em said that “You keep saying that you won’t do it, let me do it”.

The Low-Cost Phone project is a clear testament to the story that it is not just that the big man in the industry, investing in the same field will surely succeed. If there is not enough Heaven, Earth benefit, Nhan Hoa, failure will be immediate.

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