Telecom giants fight over sales rights

OPPO has accused FPT Trading of violating its distribution rights for the sale of its branded phones
Photo: Le Toan

The dispute broke out last week between the two telecommunications retailers when OPPO Vietnam, which is the sole authorised distributor of China’s OPPO smart phones in Vietnam, discovered that its contracted agents were selling phones distributed by FPT Trading. OPPO Vietnam immediately informed its agents that the direct distribution of FPT Trading phones “seriously violated OPPO Vietnam’s right to use the brand name”. The monopoly rights on distribution are worth fighting over, it seems, as the sales of mobiles in the local market are nothing short of colossal.

Shortly after OPPO’s introduction in 2013, the brand became very popular in Vietnam thanks to its broad network of selling agents. OPPO Vietnam was even ranked second in terms of mobile market share in a report by market research group GfK.

“We will repurchase all devices previously distributed by FPT Trading, and pay each agent an extra VND2 million ($91.7),” said OPPO Vietnam’s general director Do Quang Kha.

Kha stressed that the move to repurchase the phones and re-stablise the market was critical, as the price gap between phones provided by the two distributors was significant.

FPT Trading’s mobiles were sold to users at around VND1 million ($45.9) lower than the price offered at OPPO Vietnam’s sales agents.

In a hurried move, OPPO Vietnam announced that it would not provide any guarantee services on the FPT Trading mobiles sold, but later modified its position, offering customers OPPO Vietnam phones in exchange for the FPT Trading ones they had purchased. Crucially, these phones would then come under company warranty.

OPPO Vietnam sales agents were warned that they would breach their employment contracts if they continued to sell phones from FPT Trading. The company has insisted that it will sweep out all presence of its rival FPT Trading from its distribution system, which it has put great effort into developing.

In an ironic twist to this story, OPPO Vietnam’s sales agents include the two largest mobile retailers (in terms of market share), thegioididong.com and FPT Shop, which is under FPT Retail.

In response to accusations that FPT Trading violated OPPO Vietnam’s distribution rights, FPT Trading’s managing director Nguyen Quang Minh told VIR, “We always act in accordance with the legal regulations of the country”.

More recently, FPT Trading announced that its agents and sellers would deal more carefully with products at its warranty centres regardless of OPPO Vietnam’s policy. The warranty services provided by FPT Trading is no less favourable than OPPO Vietnam’s. However, it has not proved favourable to end-buyers.

“It seemed to me that FPT Trading was trying to enjoy the fruit of OPPO Vietnam’s labour. Also, it matters to me where my OPPO phones will be guaranteed, and I think OPPO Vietnam’s centres have a better understanding of this brand’s product,” said Do Quang Thai, a shopper in Hanoi’s Tay Ho district.