Vietnamese conglomerate Vingroup to close down smartphone business

Vingroup yesterday officially announced the shutdown of VinSmart, its smartphone and TV production unit. In a press statement, the Vietnam-based conglomerate says it will divert resources to its automobile unit VinFast.

VinSmart factory in Hanoi’s Hoa Lac Hi-tech Park / Photo credit: Tech in Asia

This is a surprise move as Vingroup has been aggressively marketing VinSmart as a pioneer Vietnamese smartphone maker in the past few years. Media reports in 2020 suggested that Vingroup had partnered with Texas-headquartered carrier AT&T to produce smartphones for the US market.

Founded in 2018, VinSmart was expected to put up a good fight against Samsung and other Chinese rivals and offer more affordable products to Vietnam’s consumers. However, while VinSmart captured a 10% market share in the first quarter of this year, its annual growth had been stagnant (0%), according to data from Singapore-based market analyst firm Canalys. Samsung is leading the market with a 33% market share, followed by Oppo and Xiaomi.

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The shift in resources also allows VinSmart to focus on researching and developing solutions for smart homes and electric vehicles, ensuring that VinFast can compete globally on the EV front. Vingroup plans to launch its own version of electric cars in the US in 2022, according to a Reuters report. Last month, it unveiled a new electric bus line in Vietnam.

Vingroup also is reportedly weighing an initial public offering in the US for VinFast, with Bloomberg reporting that it could potentially raise as much as US$2 billion.