What is the reason why Mobile World decreased revenue and closed many stores

The reason why Mobile World decreased sales and closed many stores

Mobile World (MWG) is one of the leading retailers in Vietnam, however, in recent times, the company has faced a decline in revenue and was forced to close many stores. There are many reasons for this situation, including objective and subjective factors.

1. Difficult economic situation:

• Economic recession: The Vietnamese and global economies are experiencing a period of recession, causing consumers to tighten spending and prioritize essential needs over shopping for phones and electronics.
• Inflation: The high inflation rate reduces people's purchasing power, affecting the sales of non-essential products.

2. Changes in consumption behavior:

• Online shopping trends: Consumers are increasingly favoring online shopping because of the convenience and variety of products. This poses a challenge for traditional retailers like Mobile World.
• Slow growth of the phone market: The mobile phone market is saturated, users tend to hold their phones longer before upgrading, leading to a decline in sales.

3. Fierce competition:

• The rise of online retailers: E-commerce platforms such as Shopee, Lazada, and Tiki are competing fiercely with Mobile World for pricing and promotions.
• Small retail chains: Many small stores also participate in the market, creating great competitive pressure for large chains.

4. Mobile World's business strategy:

• Expanding too fast: In the past, Mobile World has expanded its store network very quickly, which can lead to redundancy and inefficiency.
• Focus on Bach Hoa Xanh: The focus on developing the Bach Hoa Xanh chain may have dispersed resources and focus on core business segments.

5. Other factors:

• COVID-19 Pandemic: The pandemic has caused many difficulties for Mobile World's business, including the closure of stores during social distancing.
• Global chip shortage: The chip shortage has affected the supply of phones and other electronic products, making it difficult to sell.

Mobile World's difficult business situation is the result of many impacting factors. To overcome this stage, the company needs to adjust its business strategy, focus on improving customer experience, vigorously develop online sales channels, and optimize store operations.

What is the reason why Mobile World has decreased sales and closed many stores?

Mobile World (TGDD) is one of the leading retailers in Vietnam, specializing in mobile phones, electronics and technology products. However, recently, the company has faced many challenges that have led to a decrease in revenue and the closure of many stores. Here are some of the main reasons:

1. Impact of the COVID-19 pandemic

The COVID-19 pandemic has strongly affected many economic sectors, including the retail industry. Social distancing and travel restrictions have reduced the number of customers coming to shop at physical stores. Moreover, disruptions in the supply chain have also made it difficult to maintain the supply of goods and supply products.

2. Changing consumer behavior

In the digital age, many consumers are turning to online shopping instead of going to the store. Although TGD also has an online sales system, competing with other major e-commerce platforms is still a challenge. Customers tend to compare prices and services before making a purchase, and the variety of choices on e-commerce platforms has reduced the appeal of physical stores.

3. Fierce competition

The phone and electronics retail market in Vietnam is very fiercely competitive. Competitors such as FPT Shop, CellphoneS, and international retailers such as Apple Store and Samsung Store have created great pressure on the CEO. They are not only competitive in terms of price but also in terms of after-sales service and customer experience.

4. High operating costs

Maintaining and operating a large network of stores requires significant costs, including the cost of renting space, staff, and other management costs. In the context of declining revenue, it became financially unfeasible to maintain many stores, leading to the closure of inefficient branches.

5. Focus on restructuring

Some of TGD's stores may be closed as part of a restructuring strategy, focusing on more key markets and customer segments. This can help the company optimize its business operations, improve efficiency and profitability.

The General Director's decrease in revenue and the closure of many stores are the result of a combination of factors. To maintain growth, the company needs to adjust its strategy, promote online sales, optimize costs, and improve the quality of customer service.