Vietnam’s smartphone market declined 30% year-over-year (YoY) in the first quarter of 2023, according to Counterpoint Research’s Vietnam Smartphone Channel Share Tracker. This marks the industry’s worst Q1 decline ever.

Poor macroeconomic conditions and weak consumer demand constrained the country’s smartphone market as people delayed their smartphone purchases during the period.

Vietnam’s GDP grew 3.3% in Q1 2023, one of its lowest numbers in recent years. Investment into the country declined as foreign direct investment (FDI) volumes were reduced. Citing poor business conditions, retailers had to scale back their expansion plans and re-evaluate their business strategies. Retail stores operated for fewer hours, which reduced the employees’ working hours and their incomes as well. Footfall in the retail stores was also quite low after Vietnam’s Tết festival in January.

OEMs initially misread the demand, leading to inventory buildup in the channels, after which retailers tried to push the smartphones at discounted prices to clear the inventory. All the top OEMs except Apple witnessed a YoY decline in shipments in Q1 2023.

Samsung was the top brand in Q1 2023 with a 30% market share, despite a 32% YoY fall in shipments during the quarter. Samsung ranked foremost because of its better portfolio and competitive models. The Galaxy A04 was the top model in the <$200 price segment and was very popular among consumers. In the $200-$400 price segment as well, Samsung captured seven of the top 10 spots in Q1 2023, led by the Galaxy A14 5G. These two were the top price bands in Vietnam during the period with a combined shipment share of 71%. This dominance of lower price bands and customers’ preference towards global brands rather than Chinese brands helped Samsung maintain its leadership position in the market.

OPPO, for its part, has seen its A17 series be popular since its launch in Q4 2022. The OPPO A17 and A17k together accounted for 24% of all OPPO shipments in Q1 2023. With an increasing share in the >$600 price band, OPPO launched the Find N2 Flip in Vietnam as well. The model was available at a discount of up to $200 on pre-booking to combat the ever-increasing pricing competition in the higher-price segment.

Apple climbed to third place in Q1 2023. There was high demand for the iPhone 14 Pro series early in the quarter, which eventually fizzled out. Apple unexpectedly cut iPhone prices during the quarter to boost demand and clear the high inventory in channels. The price of the iPhone 14 Pro Max was lowered by an average of 12% in Q1 2023 compared with its launch price. Due to the reduced iPhone prices, Apple shipments increased 12% YoY in Q1 2023. This helped the >$600 price band capture a 24% share of the market in Q1 2023, compared to just 17% in Q1 2022.

Meanwhile, Xiaomi and vivo faced a difficult Q1 2023, declining 46% YoY and 52% YoY, respectively. Demand in the <$200 price band declined in Q1 2023 with shipments falling 38% YoY. The two brands each lost market share during the quarter as both have high exposure to this price band.

Online shipments’ share fell to 15% in Q1 2023 from 17% in Q4 2022, as promotional activities on online channels were reduced after the festive period. With offline retail chains offering discounts and price cuts on premium devices as well, e-commerce platforms struggled to attract customers.

The Vietnamese government considers 5G connectivity as a crucial factor in the pursuit of digital transformation. It aims to have 100% of the population’s devices connected to a 5G network by 2030.

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