Samsung Electronics’ overseas sales, excluding semiconductor, have been on the decline in most areas, such as the United States and China. However, Vietnam is an exception.
The sales of Samsung Electronics Ho Chi Minh City CE Complex (SEHC), which is in charge of televisions and home appliances, grew more than 280 billion won (US$246.37 million), according to Samsung Electronics on April 3. Samsung Electronics Vietnam Bac Ninh (SEV) and Samsung Electronics Vietnam Thai Nguyen (SEVT), which produce information technology (IT) devices, including smartphones, mainly for overseas markets, increased over 2 trillion won (US$1.76 billion) last year based on separate financial statements. The combined sales of Samsung’s subsidiaries in Vietnam rang up 53.99 trillion won (US$47.52 billion).
This stands in stark contrast to a rapid drop in sales in the United States and China, which are traditionally large markets. The sales of Samsung Electronics America (SEA) decreased nearly 2.16 trillion won (US$1.90 billion), while that of the firm’s subsidiaries in China plunged a total of 5.60 trillion won (US$4.93 billion). In addition, the company saw its sales shrink 460 billion won (US$404.75 million) in the Samsung ElectronicsGmbH in Germany, 750 billion won (US$659.92 million) in the Thai Samsung Electronics (TSE) and 130 billion won (US$114.39 million) in the Samsung Electronica da Amazonia (SEDA) in Latin America. Samsung Electronics showed sluggish sales in most of its overseas subsidiaries, except for Vietnam.
Samsung Electronics grasped Vietnam’s spending power as emerging “young market.” Young Vietnamese consumers are highly interested in IT devices, including smartphones, and they get new products more frequently than people in other countries. Industry sources said the population aged between 10 and 29 in Vietnam reaches 31 million out of the total 96 million. The number of mobile device users stands at 70 million, nearly 73 percent of the total population.
Vietnam is also playing a vital role as a production base. With a rise in labor costs in China, Samsung Electronics started to move its production base to Vietnam early. Since Vietnam’s gross domestic product (GDP) per capita still falls short of US$3,000 (3.41 million won), the country is attractive as a production base. Samsung Electronics is said to have more than 100,000 local employees.