Market Report, "Vietnam Consumer Electronics Report Q4 2013", published

We project Vietnam consumer electronics spending will grow by 18.5% in US dollar terms in 2013 to US$6.1bn. Sales of handsets and TV sets reported a dip in Q113, despite a typical boost from the Lunar New Year shopping season. In 2013, uncertainties over the outlook for employment and more difficult access to credit could cause households to cut spending. However, our core scenario is for continued growth. The country's vast, underpenetrated rural market offers the greatest growth potential, while Hanoi and Ho Chi Minh City accounted for most sales. Growth areas include smartphones, which could comprise 50% of handset sales in 2013, and LED TV sets, which reported triple-digit growth in 2012.However, sales of LED TVs and smartphones have been fuelled by lower prices, placing pressure on retailer and vendor margins.

Headline Expenditure Projections

* Computer hardware sales: US$1.7bn in 2012 to US$1.9bn in 2013, +15.9% in US dollar terms. Low penetration of PCs leaves opportunities for vendors, with low cost tablets from Chinese OEMs experiencing rapid growth.
* AV sales: US$1.4bn in 2012 to US$1.6bn in 2013, +14% in US dollar terms. Forecast in US dollar terms unchanged, with flat-screen TV sets expected to provide the most dynamic development.
* Handset sales: US$2.0bn in 2012 to US$2.5bn in 2013, +23.9% in US dollar terms. Forecast in US dollar terms raised as sales of Android smartphones accounted for an increasing share of sales.

Full Report Details at
- http://www.fastmr.com/prod/712846_vietnam_consumer_electronics_report_q4_2013.aspx?afid=301

Risk/Reward Rating

Vietnam's score was 44.8 out of 100, leaving it in 12th place in our latest Asia CE RRR table. BMI expects Vietnam to attain a higher place in our rankings over time due to the rising penetration of consumer electronics devices such as smartphones and flat-screen TV sets.

Key Trends & Developments

Smartphones are accounting for an increasing share of total handset sales in Vietnam, driving growth of the market. However, growth has been heavily weighted towards the low-end of the market, with VND1.5-3.5mn smartphones accounting for around 60% of smartphone sales in mid-2013, according to retailer reports, but only 20% of the value of the market. The growth in smartphone sales has been fuelled by the popularity of Android-based models, although Nokia's Lumia 520 is a notable success from the Windows ecosystem. Although the operating system landscape is competitive, we expect Android to maintain its top position over our five-year forecast period to 2017.

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