In a statement that will probably surprise many people, Chairman of VinGroup Pham Nhat Vuong affirmed that he would bring VinFast and VinSmart to an extremely fastidious market as the US. VinGroup will even consider the US market as a key, after the US output reaches the set target and continues to deploy in other export markets.
VinSmart’s approach to the global smartphone war is completely different from many big companies, especially Chinese giants, which are ranked in the top 6 of the world. By the end of May 2020, all four Chinese smartphone brands, along with Apple and Samsung, created the top six, do not sell phones in the United States. Of these, Huawei is the only U.S. government imposed ban; The remaining 3 companies, Xiaomi, OPPO and Vivo have not set foot in the US, despite taking turns in the top 5 globally for more than half a decade. The US market currently has only two Chinese names, OnePlus (under BBK Electronics with OPPO, Vivo) and Motorola, which was acquired by Google from Google in 2014.
So, what is the reason why VinGroup dares to take a step that can be considered to completely go against the strategy of cult smartphone companies?
1. Building a position
Success in the most fastidious market will help the export path of Vsmart later become easier.
First of all, it should be said that the possibility of Vsmart phones becoming rivals (in terms of sales) of Apple, Samsung or OnePlus in the US is very low. This is the market leader in the modern smartphone war, has been saturated for a long time and also has very strict requirements, mainly focusing on the high-end segment.
However, the high enough sales in the US will be a testament to the quality experience of Vsmart phones. If conquering US users, Vinsmart can be completely confident that its products will conquer users of India, Singapore, Latin America, Europe … “Fragrance” from the technology capital of the world gender will spread, and as Mr. Vuong asserts, “If successful in the US, conquering other markets will be easier”.
2. Open the machining path
The appearance of Vsmart smartphones in the US will show that Vietnam has enough capacity to process quality products for other smartphone brands.
In 2019, VinGroup has commenced the construction of the Vsmart Smartphone Factory Project in Hoa Lac Hi-Tech Park (Thach That, Hanoi) with an area of 15.2 hectares. With a maximum capacity of 125 million units / year – which is many times more than the purchasing power of the entire Vietnamese market, VinGroup has not hidden its ambition to use this factory to “process products for other phone companies”.
Once again, the Vsmart will be a declaration of Vsmart’s capabilities. Vietnamese smartphones sold in the US, supported by Americans, will be the clearest evidence that VinSmart can process quality products for Apple to sell in the US, to Google for sale in Europe or for Xiaomi to sell in India. . In the context of increasing US-China trade tensions (the US has even blocked Huawei’s manufacturing lines), it is clear that VinSmart will need to find ways to promote its production capacity in Vietnam.
3. Expand cooperation
Setting foot in the US is the basis for establishing closer cooperation with the US giants, such as Google or Qualcomm.
As the world’s leading technology market, the United States has a high level of intellectual property protection. Mobile carriers appear late like Xiaomi or Vsmart so need to be wary of patent issues when arriving in the US. A strong relationship with the giants owning their own creative copyright is a must, and so far it seems that only OnePlus and Motorola / Lenovo have overcome this challenge.
Fortunately, it seems that VinSmart has long built a good relationship with Google and with Qualcomm. The partnership with Google is mentioned by VinSmart not only on smartphones but also with smart TVs. Qualcomm also favored VinSmart to quickly supply chips instead of requiring challenges like small smartphone companies. Now, when Vsmart comes to the US, VinGroup will have more and more grounds to build up these relationships. And that may be an advantage when Vsmart continues to set foot on the next export markets.
4. Step up to senior
The US is a niche market for Vsmart to test its own premium vision.
As a market that is more focused on the high-end segment instead of the popular segment like Vietnam, Eastern Europe or India, the United States can be considered a suitable destination for those who want to advance to the high-end segments. than. Samsung’s position as the most successful Android company in the high-end segment of Samsung is partly due to the marketing strategy of “The Next Big Thing” in the US. A force like BBK (OPPO, Vivo, Realme …) when coming to the US also launched only one brand focused on the high segment, OnePlus. And, after all, the phone company that dominates the premium segment is still an American brand.
After establishing successfully in the low-price segment, VinGroup is expected to launch “Vsmart Lux”, its first mid-range / high-end product. Going to America and letting Lux (or later Super Lux) “test fire” is something Vsmart should do. No smartphone company can forever be limited to the low-cost segment, which has very low profitability. If it can build a foothold in the US, Vsmart has the right to believe that premium phones in Vietnam can stand on par with Samsung, OnePlus and even Apple.
5. Above all: Confidence of success
Who is sure that Americans will be more difficult than Vietnamese?
Also in the same shareholder event, VinGroup claimed to have sold 1.2 million smartphones in 17 months. Last March, Vsmart became the first brand to reach the top 3 in Vietnam with a market share of over 10%. These numbers can be considered small when compared to the US or Chinese brands.
However, remember, only a “small” success of Vsmart is also a miracle. Vietnamese manufacturers are slow, but Vietnamese users have been exposed to smartphones since very early. Americans are difficult, but also Vietnamese users are not easy to choose with their own smartphones?
Therefore, above all, VinGroup still has the right to believe in the success of Vsmart in the most difficult market in the world. Success in Vietnam shows that VinSmart is really capable of doing things that, 2 years ago, many people still thought impossible. Who knows, two years from now, the impossible of today has become possible in America?