Samsung hounded by Chinese phones in India even as it says goodbye to China; sales hit, future bleak

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Updated: October 4, 2019 3:26:12 PM

While Samsung has shut down its last operating facility in China as it faces cut-throat competition from rival local brands, the company is also facing heat of burgeoning competition from Chinese manufacturers closer home.

Samsung, Samsung mobile phones, Samsung galaxy M series, Samsung smartphones online, samsung Galaxy M30, Samsung smartphone shipments Four out of India’s top-selling phone brands belong to China, led by Xiaomi, according to IDC’s latest data. (Reuters photo)

While South Korean mobile phone maker Samsung has shut down its last operating facility in China as it faces cut-throat competition from rival local brands, the company is also facing the heat of burgeoning competition from Chinese manufacturers in India. “In India, Xiaomi and Oppo are fast gaining market share at the expense of Samsung especially in the entry-level segment where price is an important purchase criteria for consumers,” Loo Wee Teck, Head of Consumer Electronics at Euromonitor International, told Financial Express Online. In fact, four out of India’s top-selling phone brands belong to China, led by Xiaomi, according to IDC’s latest data. Meanwhile, Financial Express Online has reached out to the company for further comments.

Further, adding to Samsung’s woes are Indian millennials who have become price-conscious and are choosing models that cost-effective as well as offer specs. “The millennials in India are overwhelmed with cost competitive models without major compromises on product specifications. Samsung will be able to claw back some lost sales but consumers have less brand loyalty and price is still a key purchase criteria,” Loo Wee Teck added.

Rise of Xiaomi, OnePlus, Vivo and others

Once a market leader, Samsung is gradually losing ground since 2017 and 2018 as new brands have found stronger footing. While Xiaomi clawed its way to the top in 2018, “rise of Vivo added more pressure on Samsung”, Loo Wee Teck said. Then there is China’s OnePlus which is selling like hot cakes in the ongoing festive season sales. The company has even registered a Rs 500 crore revenue by the second day of the e-commerce behemoth Amazon’s Great Indian Festival Sale, according to various media reports.

How is Samsung dealing with competition?

Samsung is learning lessons the hard way from its own competitors and is now deploying tactics used by them to lever sales. Recently, Samsung launched the M series range specifically for the Indian market via e-commerce platform Amazon. The company has taken a leaf out of rival Xiaomi’s book and is also selling the range in its own online stores, Lee Woo Teck said.

Meanwhile, India remains one of the most important markets for the manufacturer and it also houses the biggest factory for Samsung in the world. The company not only caters to Indian demand via the unit but also exports globally from the Noida-based factory. In 2018, Samsung made a hefty investment of Rs 4,915 crore to add new capacity at the Noida plant.

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