A serendipitous search for a new phone for his wife sparked the birth of Mobile World, now in its 12th year
Inspiration strikes at the oddest of times. One morning in January 2014 when Tai Nguyen was out shopping for a new phone for his wife, a gift from his annual work bonus, he struck a hurdle. He’d already been to two shops and yet no one was able to provide him with the complete picture of what he could get for his money. Had they been able to show him 10 models within a similar price range, he said he could have made a decision. At that time, a mobile phone was a big investment costing around VND 5 million, while the average income per capita in Ho Chi Minh City was just VND 1.1 million.. He had the money, he was willing to pay, yet could not find what he wanted. Tai Nguyen smelt a business opportunity. The experience sparked the idea for Tai’s enormously successful Mobile World, which would later become a key player in Vietnam’s hardline retail industry.
A relatively young enterprise, Mobile World was established in 2004. Its explosive growth has impressed many experts who had been predicting the impending failure of the retail electronics field at that time. Today, Mobile World continues to record consistent development despite the volatilities of the economy. Retail Asia Publishing and Euromonitor International’s Top 500 Retailers in Asia Pacific 2015, for example, ranked Mobile World JSC second after Saigon Coopmart in Vietnam’s top 10 retailers.
Considered one of the fastest growing retailers in Vietnam by revenue, earning on average VND 70 billion every day, compared to Nguyen Kim shopping centre’s VND 25 billion, Mobile World brings in VND 1 billion every 13 minutes. As a result, the company accounts for 30 percent of the mobile phone market in Vietnam and is considered by locals to be a familiar and trustworthy electronics retailer.
Table 1:Revenue of Mobile World
Source: MWG Annual Report 2009-2015 (mwg.vn/report)
Despite the many long-established competitors in the electronics retailing field, the company retains firm control of its dominant position. Mobile World’s success is undeniable, due to its significant performance in three major areas: its audacious strategies, a thorough understanding of consumer behaviour and effective management.
Bold business strategies for greater success
Gaining a technological advantage
In 2004, although the e-commerce industry was yet to become popular in Vietnam, Tai wished to open a business selling mobile phones. He was quick to recognise the opportunity to create a comprehensive website that could provide detailed information from technical facts as well as images of the various types of mobile phones available in Vietnam. With the launch of the website, Mobile World became the first in the country to allow customers to obtain online product knowledge prior to visiting a store. This improved the purchase experience, making it possible for customers to research a product before spending a considerable amount of money on a mobile phone.
Go small but quick
While Mobile World’s other main competitors focused on developing a large 5,000 square metre stores in hypermarkets model, selling everything from appliances to electronic devices, Mobile World pursued a niche market. It did not concentrate on selling large appliances, which required large storage and display spaces and which yielded slow growth rates. Speaking in 2015, Mobile World’s CFO, Vu Dang Linh, said in 2015 that the company instead decided to engage in information and communications technology (ICT) products such as mobile phones, tablets and laptops that are for appliances in this industry.
With less than 1,000 square metres per store, the cost to open a new Mobile World outlet is definitely lower compared to others in the industry. As a result, the number of Mobile World stores has been increasing rapidly over the last few years. In 2009, the company had 38 stores, but by March 2016, this had grown to 654 stores across the country. The strategy has enabled the company to expand to major cities such as Ho Chi Minh City and Ha Noi, as well as other provinces in Vietnam. Outlets are established quickly. When a fire gutted a Mobile World shop in January 2016, three days later, while the media was still busy reporting the incident, it reopened. Many people were surprised at that time, but few knew that this was the usual time taken by the company to open a new store.
Table 2: Number of stores of main hardline retailers in Vietnam (2011–2016)
Source: Adapted from MWG (2016), Nguyenkim (2016), Pico (2016)