Phone exports witness negative growth for the first time

	Phone exports to India increase by 96%
	Phone exports to Italy increased 305 times
	$US 133 million per day from phone exports

Growth rate (%) of mobile phone group. Chart: T.Binh

A turbulent year

The General Department of Vietnam Customs has just announced data related to import and export activities in 2020.

One interesting piece of information is regarding the export of phones and spare parts.

For the whole of 2020, the export of mobile phones and components is only US$51.18 billion, down slightly by 0.4% compared to 2019.

Of which, exports of this commodity group to China reached US$12.34 billion, up strongly by 48.8%; to the EU reached US$10.06 billion, down 18.6%; to the US market, worth US$8.79 billion, down 1.2%; to South Korea reached US$4.58 billion, down 11%, compared to the previous year.

Thus, although it is still the largest export commodity group in Vietnam, phones and components have experienced a turbulent year with negative growth after 11 years in the list of import-export goods statistics by the customs office.

In the first month of 2020, the export turnover of this item was only US$2.7 billion, down sharply by 17.8% over the same period in 2019.

Then, despite the rise in February and March to end the first quarter of 2020 with a turnover of US$12.88 billion, up 6.2% over the same period last year, the export of phones reversed the consecutive declines in the following months and the second quarter ended at only US$21.95 billion, down 6.5%.

Entering the third and fourth quarter, the situation has improved but not enough to revive Vietnam's largest export industry. So by the end of 2020, the export of phones and components is still in a negative growth state.

Regain growth momentum

The appearance of the group of phones and accessories was associated with the establishment of Samsung Electronics Vietnam Co., Ltd. (SEV).

SEV was granted an investment certificate in March 2008, with a total investment of about US$700 million, in Yen Phong Industrial Zone (Bac Ninh).

By April 2009, the company put into operation a mobile phone assembly workshop and in August 2009, another factory for pressing and painting phone covers went into production.

At the end of October 2009, SEV officially opened and became the first mobile phone factory in Vietnam, with a capacity of about 1.5 million products per month at that time.

From January 2010, the group of mobile phones and accessories for export officially appeared in the list of import and export statistics for major commodity groups, which were periodically announced by the General Department of Vietnam Customs.

In January 2010, the group of phones and accessories reached a turnover of nearly US$136 million.

Reviewing the statistical data of the General Department of Vietnam Customs from that time, phones and components are always a group with high growth rates often over 2 digits, with even a year of growth up to 3 digits such as in 2011 increased to 178.3%.

With such remarkable growth, phones and components quickly usurped the throne of the traditional groups such as textiles, footwear, seafood to become the largest export commodity group of Vietnam.

This is also consistent with the production expansion of the Samsung Group to turn Vietnam into a country with the group's largest mobile phone production in the world.

According to the report of the TOP 500 largest enterprises in Vietnam (VNR500), Samsung Electronics has nine mobile phone manufacturing factories around the world (Korea, Indonesia and India each have one factory, China, Brazil and Vietnam each have two factories).

Two factories in Vietnam are SEV (Bac Ninh) and SEVT (Thai Nguyen, established in 2013, with investment capital of US$5 billion). Currently, these are the two largest and most modern mobile phone assembly and component factories of Samsung Electronics globally.

In which, SEV currently has about 40,000 employees and SEVT has 70,000 employees. These two factories account for more than 30% of the global workforce of Samsung Electronics and supply more than 50% of the total number of Samsung phones globally.

About 70% of the capacity of both factories is devoted to manufacturing mobile phone components for domestic assembly as well as for export to other factories.

There is no specific analysis on the decrease in turnover of mobile phone products in 2020, but perhaps one of the reasons is the Covid-19. Therefore, the demand for purchasing consumer products has decreased, so it is possible that mobile phones did not avoid that trend.

However, with the large production scale mentioned above, it is expected that the mobile phone group will soon return to a high growth rate as before.

In fact, at the beginning of 2021 optimistic signs appeared. Specifically, according to the latest statistics of the General Department of Vietnam Customs in the first 15 days of January 2021, the export of phones and components reached US$2.86 billion, up to nearly US$1.5 billion (in the same period of 2020 it reached US$1,375 billion) and continues to maintain its position as the largest export commodity group of Vietnam.