Mobile World expected to benefit from online business tax collection
Fair competition will be re-established as all businesses are held to the same tax standards.
The recent focus on enforcing tax compliance for online businesses is expected to create a fairer competitive environment in Việt Nam’s retail sector.
According to DSC Securities Corporation, this change will ease the pressure on Mobile World Investment Corporation (MWG), which has faced unfair competition from online retailers that previously operated without equivalent tax obligations.
Nguyễn Đức Tài, Chairman of MWG, emphasised the potential benefits of a more balanced competitive landscape during the company’s third quarter investor meeting.
"If the playing field is truly levelled, Mobile World will undoubtedly achieve robust growth," he said, and highlighted that MWG’s strengths lie in serving markets where online retailers struggle, particularly for high-value products requiring installation and after-sales service.
"No one wants to risk tens of millions of đồng just to save a few hundred thousand, only to face uncertainty about who will install the product or resolve issues if they arise," he said, suggesting that the after-sales capabilities of online shops are still years behind MWG’s established infrastructure.
DSC notes that MWG holds significant competitive advantages, including comprehensive after-sales service and direct sourcing.
MWG’s network of technicians provides installation, maintenance and repair services, which are challenging for smaller online retailers to replicate.
Meanwhile, by importing products directly from manufacturers, MWG can offer competitive prices and better margins compared to smaller competitors reliant on intermediaries.
These factors, combined with MWG’s strong market presence, position it as a formidable player even as online competition grows.
DSC expects MWG’s performance to continue recovering through the final quarter of 2024, driven by sustained demand for smartphone upgrades, the market buzz around the iPhone 16 launch, positive revenue growth at Bách Hóa Xanh (BHX) during the Tết shopping season and expanding market share in the ICT (Information and Communication Technology) segment.
However, DSC acknowledges potential headwinds, including slower growth at BHX after a rapid expansion phase and challenges in scaling fresh food operations as BHX enters Central Việt Nam markets.
MWG appears well-prepared for these challenges, supported by a clear strategy that leverages its offline strengths while ensuring competitiveness with online channels.
The company has already adapted its offerings in lower-value segments, such as small household appliances, to remain competitive in the online space.
In time, fair competition will be re-established as all businesses are held to the same tax standards, according to Tài. — VNS
