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Vietnamese buy luxury smartphones on installment plans, loans

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More than half of the purchases of premium smartphones (costing more than VND10 million) are paid by installment plans.

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At The Gioi Di Dong (Mobile World) , the largest phone distribution chain which holds 40 percent of market share, the number of buyers on installments accounts for 48 percent.

At FPT Shop, the second largest chain, the figure is 60 percent. Meanwhile, CellphoneS reported that 56 percent of its payment transactions use loans from finance institutions.

These buyers make a small deposit and pay the rest within 6-12 months. 

A representative of The Gioi Di Dong said nearly all retailers pay by installment with interest rate of zero percent.

Meanwhile, a representative of FPT Shop said the campaigns aims to stimulate demand. 

The number of phones sold on installment accounts for 26 percent of total phones sold at The Gioi Di Dong. At FPT Shop, the figure is 30 percent. Accounting for 26 percent, the products sold on installment bring 47 percent of The Gioi Di Dong’s revenue.

At The Gioi Di Dong, 61 percent of buyers of mid-range products (VND4.5-10 million) pay by installment. The figure is 38 percent at CellphoneS. At FPT Shop, half of buyers of mid-range phones pay with borrowed money.

As for low-cost products (less than VND5 million), buyers also choose to pay by installment: 11 percent at The Gioi Di Dong and 6 percent at CellphoneS.

“Instead of paying a big amount of money at once, I will pay within 12 months. You will not regret it if you only pay a little money every month,” said Vu Hoang Thong, an officer of a multinational conglomerate, who bought a product at nearly VND20 million.

However, Thong admitted that he only buys on hire-purchase if the interest rate is zero percent.

Vo Le Thanh Tam from IDC Vietnam said the hire-purchase programs is applied by many big phone dealers. 

An analyst commented that Vietnamese youth now tend to buy goods with borrowed money, while their parents only bought goods if they could save enough money.

However, hire-purchase is not applied at some retail chains. Mai Trieu Nguyen, the owner of Mai Nguyen Luxury chain, said all of his clients pay in cash.

Vietnam’s GDP per capita reached an estimated VND48.6 million (USD2,215) in 2016, up $106 compared with 2015, according to the General Statistics Office (GSO).

 

 

Source: VietNamNet

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