After nearly four years of setting up business in Vietnam, Apple Vietnam Limited Liability Company as a sole Apple product distributor in the country recorded hundreds of millions of US dollars in revenue but its profit accounts for a mere 2%.
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However, the company’s profit margin was not correlatively big when its gross profit margin fluctuated around 7% and the after tax profit was just VND259 billion (US$11.1 million) in 2018.
Apple Vietnam, a unit of Apple Inc., was established in October 2015, owned by the Ireland-based Apple Operation International, with charter capital of VND15 billion (US$643,000).
The company does not directly retail iPhone and iPad in Vietnam market but focuses on wholesale businesses, in other words, importing and distributing Apple’s devices to some Vietnamese retailers including Mobile World and FPT Shop.
Although being an official distributor of Apple products in Vietnam, Apple Vietnam only makes up about 50-60% of the total consumption of Apple products in the country due to the informal entry of Apple products hand carried.
As the domestic retail chains used to import products from Apple Singapore directly or via FPT Trading, or Synnex FPT now, the advent of Apple Vietnam has snatched nationwide iPhone distribution right from FPT Trading since the fourth quarter of 2015, leading to huge adverse impact on FPT Trading in 2016.
Coupled with liquidating the Nokia Lumia inventories, FPT Trading’s profit from mobile phone sales in 2016 plummeted by 90% from VND311 billion (US$13.3 million) in 2015 to VND34 billion (US$1.5 million).
Although iPhone retains its charm by the classy design, the sales of the US’s brand seems to slow down in the face of South Korea’s Samsung and China’s emerging Huawei Android smartphones which are less pricey but packed with a number of breakthrough features.
