Pre-owned names invest in services to boost growth

Digiworld Corporation last month revealed its fresh acquisition of nearly 73 per cent of pawnshop chain Vietmoney. The strategic acquisition is set to bolster its plans to venture into the business of selling second-hand mobile phones and laptops.

Digiworld Corporation last month revealed its fresh acquisition of nearly 73 per cent of pawnshop chain Vietmoney

Digiworld chairman Doan Hong Viet highlighted the merger with Vietmoney as a strategic pivot, aligning with the company’s exploration of the second-hand products’ business potential.

“With over 40 per cent of networked devices being iPhones, and new sales accounting for just 13-18 per cent depending on the quarter, the market for used iPhones is evidently double the volume of new units sold annually,” Viet said. “These devices have a lifespan of about six years, with users typically upgrading every two to three years, thereby magnifying the scale of the second-hand phone market. The profit margins on pre-owned products are also notably higher than those on new items.”

Moreover, the recent contraction in consumer lending has challenged Digiworld to find innovative ways to stimulate spending, and the partnership with Vietmoney creatively addresses this, Viet stressed.

The market for other second-hand goods is also anticipated to exhibit substantial growth potential, driven by escalating consumer demand.

The allure of pre-owned items cuts across generational lines, with 83 per cent of Vietnamese consumers reporting purchases of second-hand goods and intending to keep this trend, as per the Carousell Recommerce Index. This segment is undergoing a major shift, with projections indicating its growth from a $1.1 billion industry in 2011 to an expected $5.1 billion by 2026, according to RedSheer Strategy Consultants.

In the automotive sector, Tasco in late 2023 inaugurated its fourth Automall in Tan Phu district of Ho Chi Minh City. This expansion is part of Tasco’s ecosystem, which includes Carpla, a platform for buying and selling used cars.

Carpla chairman Nguyen Danh Hieu said, “Concurrently, we are investing in research to enhance our technology and service quality across both online and offline platforms, aiming to maximise convenience and satisfaction for both buyers and sellers. Our goal is to become the top brand in Vietnam’s pre-owned car market.”

Despite Tasco’s substantial investments, Haxaco was the pioneer in Vietnam’s used car market, launching the country’s first used car business centre in 2011. Known for distributing new Mercedes-Benz vehicles, Haxaco also specialises in selling pre-owned Mercedes-Benz cars and offers detailed services including paint and bodywork, and modifications.

In the same vein, Savico – another major vehicle dealer - has laid out plans to further expand its dealership network and explore the development of new automotive brands.

“Our objective is not only to solidify our presence in the automotive sector but also to diversify our offerings by venturing into the used car market and introducing new energy vehicles, alongside bringing new luxury car brands to Vietnam,” a company spokesperson said last year.

As Tasco and Savico ambitiously expand, the used car market faces contrasting challenges, pressured by the launch of new car models and significant discounts on new vehicles.

This pressure has resulted in losses for many in the sluggish used car sector, compounded by complex vehicle transfer procedures introduced by the Ministry of Public Security in August last year that extended transaction times and seemingly dampened buyer interest.

“The lengthy ownership transfer process has significantly impacted interest,” noted one dealership owner in Hanoi. “Moreover, the market is affected by recalls and broader economic factors, with promotions on new cars making them more attractive and leading to a 20-30 per cent drop in used car transactions.”

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