Vietnam emerges as a rising market for Apple

The US technology giant launched an online store in Vietnam on May 18, giving local consumers the chance to buy any Apple product directly for the first time.

The recent opening came following the high-profile launch of its first physical shops in India, recognizing the growing importance of emerging markets for the iPhone maker, said CNN.

Markets such as Vietnam, India, and Indonesia are rapidly becoming more important for Apple, as its growth in developed markets, including China, slows down, prompting the company to focus on places where it’s traditionally been less active, according to the media outlet.

Tim Cook, CEO of Apple, pointed to the company’s prospects in emerging economies, calling them bright spots in the company’s financial results. On an earnings call made this month, Cook said he was “particularly pleased” with the performance in these markets during the first three months of the year.

Daniel Ives, managing director of Wedbush Securities, predicts that “over the coming years, Indonesia, Malaysia, and India will comprise a bigger piece of the pie for Apple, given its efforts in these countries.”

Meanwhile, Chiew Le Xuan, a research analyst who covers smartphones in Southeast Asia for Canalys, said May 18’s launch of an online store in Vietnam showed how Apple was “further cementing” its presence in emerging markets.

He said the tech giant had been “actively increasing” its presence in the region over recent months, ramping up its distribution and network of authorised resellers, especially in Malaysia, adding that Apple has ample room to run in these markets.

Apple joins a growing list of global businesses that have become bullish on Southeast Asia, where increasing investment is being poured into manufacturing.

The region’s consumer base also holds promise, with the number of middle-income and affluent households in economies such as Vietnam, Indonesia, and the Philippines projected to grow by around 5% annually through to 2030, according to the Boston Consulting Group. These figures have led the consultancy to dub  this group of consumers “the next mega-market.”

The allure of Southeast Asia’s rising middle class “has changed the dynamic in these countries, which previously Apple stayed away from,” according to Ives.

However, challenges remain as premium brands like Apple have struggled for years to compete in emerging markets because of the price of their products, choosing instead to rely on local resellers.

iPhones, which cost between US$470 and US$1,100, are expensive for consumers in less developed Southeast Asian economies, where the bulk of smartphone shipments are priced under US$200, according to Chiew.

He outlined that Apple’s absence from places such as Cambodia or Vietnam was typically more apparent around the launch of a new iPhone, particularly as buyers from those countries often flew to Singapore or Malaysia in order to purchase devices and take them back for resale.

This could change over the coming years, particularly as Apple continues to increase its firepower in the region, he noted.