The company, run by Vietnam’s richest man, has built its core business in the real estate and retail sectors but has branched out to include car manufacturing, gene decoding and now mobile phones.
The company’s mobile phone subsidiary, Vinsmart, launched four phone models yesterday, priced between $120 and $280.
“(We are) aiming to bring to our clients the opportunity to experience high-quality, made-in-Vietnam products,” Nguyen Viet Quang, deputy chairman of Vingroup, said at the launch event in Ho Chi Minh City.
The company said its factory in the port city of Hai Phong has the capacity to produce 5mn phones per year and could expand to smart TVs and smart homes.
Vingroup acquired a 51% stake in Spanish consumer electronics maker BQ earlier this year, which will help with product development.
Yesterday Vinsmart announced a patent licensing agreement with US chipmaker Qualcomm for mobile phone terminals.
Vinsmart will face tough competition in fast-growing Vietnam where middle-class consumers with burgeoning budgets are buying Samsung and Apple phones.
Several smaller Vietnamese firms already make their own mobile phones, but none have taken off in the country where about a third of the country’s 93mn people are smartphone users.
Samsung held 37% of the market in the second quarter of this year, while Oppo had 22% and Apple had about 5%, according to Counterpoint analysis firm.
Vinsmart’s phones are unlikely to be directly competing with expensive Apple models, and the company will struggle to unseat Samsung right away, said Kenny Liew, a telecommunications analyst at Fitch Solutions.
“We don’t think it will carve out a very significant market share, but will likely be able to produce enough scale to generate a profit on its investment,” he said.
One major leg up for Vinsmart will be easy access to retail space: the company already has over 1,200 supermarkets and convenience stores all over the country.
Vingroup is owned by Pham Nhat Vuong, a press-shy billionaire who started his career selling dried noodles in Ukraine.
He is worth an estimated $6.7bn, according to Forbes. His Vingroup cradle-to-the-grave empire includes housing, resorts, farms, schools, hospitals, shopping malls and cars.
Vietnam is one of Asia’s fastest growing economies, with GDP growth hitting above 5% for the past five years.
That growth has largely been driven by exporting cheaply manufactured goods, from Nike shoes and H&M T-shirts and, increasingly, tech products like Samsung phones and Intel processors as it moves up the value chain.
Around 60% of Samsung’s phones are made in Vietnam, and last year Samsung products accounted for about 20% of Vietnam’s exports.