Vietnamese retailer Mobile World closes stores in Cambodia

“After six years of operation, we have decided to stop doing business in Cambodia to focus on other business models and other markets,” Mobile World’s head of electronics and phone retail Doan Van Hieu Em he told investors this week.

According to the Bluetronics website, Cambodia is now home to only 2 Bluetronics stores, both in Phnom Penh, a significant decrease compared to mid-2021 when it was the largest retail chain in Cambodia with 55 stores.

Mobile World opened its first Cambodian store, BigPhone, in Phnom Penh almost 6 years ago. Using a brand identity similar to its retail chain in Vietnam, Mobile World expected each store in Cambodia to record sales of VND2 billion ($84,700) a month.

By the end of 2019, BigPhone had been renamed Bluetronics and was selling both phones and many other electronic items.

Mobile World management planned to use Bluetronics as a springboard into the rest of the Southeast Asian retail market.

In Cambodia, revenues for the chain grew in the triple digits for nearly four straight years, peaking at nearly VND500 billion in 2021. However, this growth still made up less than 0.5% of Mobile World’s total revenue.

However, Cambodia’s small market size and complicated tax policies hindered the chain’s expansion.

Most retail stores in Cambodia do not apply value added tax, but Bluetronics does. This, plus import taxes, made retails prices 10-15% higher at Bluetronics than at other outlets.

Mobile World management said Bluetronics was between a rock and a hard place: it would not be able to compete if it kept prices high, but it also wouldn’t be profitable if it lowered prices.

“This chain has no potential to contribute significant revenue and profit in the future, so we have proactively closed it to reduce the burden,” said an announcement by Mobile World management.

After withdrawing from Cambodia, Mobile World said it will focus on the Indonesian market with its new EraBlue phone and electronics chain. It opened 5 Indonesian stores in December 2022, and each has posted average monthly sales of VND5 billion so far.

An EraBlue electronics store in Indonesia. Photo by Mobile World

Mobile World management said Indonesia’s phone and electronics market is worth some $14 billion, much larger than Cambodia’s, and even twice the size of Vietnam’s.

The Indonesian market has a lot of traditional stores, so their product portfolios and after-sales services are limited.

“In Indonesia, there are two competing retailers,” said Em. “Compared to them, we’re equal or only slightly lesser.”