Samsung, which dominated the country’s smartphone market in 2023, has now fallen to the third position in volume terms. Analysts attribute this decline to intensifying competition from Chinese brands such as Vivo and Xiaomi, and increasing consumer fatigue with the brand, especially in the non-premium mobile phone market.
In the October-December quarter of 2022, Samsung had replaced Xiaomi to become the top smartphone brand in the country with a market share of 20%, according to data by Counterpoint Research.
In fact, in 2022 the company led the market in terms of value as well, with a 22% market share, followed by Apple. Samsung’s growth at that time was attributed to focus on expanding presence in mainline (offline) retail with better margins alongside online deals, demand for premiumisation, Samsung finance+ scheme, and strong performance of A series in the Rs 30,000 – Rs 45,000 category.
Cut to the October-December quarter of 2023. The company lost its market share to Chinese smartphone brands and the share loss continued thereafter. According to IDC, in the April-June quarter, Samsung’s market share fell to 12.9% from 15.7% in the year-ago period. The company’s unit shipments to distributors or retailers also fell 15% year-n-year, IDC data show.
Research firms Counterpoint and Canalys estimated the April-June market share of Samsung at about 18% and 17%, respectively, also placing it at the third spot after Xiaomi and Vivo with 19% share each. Samsung did not respond to FE’s query on the subject.
“These days consumers give preference to CMF (colour, material and finish) while choosing smartphones. While Samsung phones are lagging in CMF, Chinese brands are focusing on the same in the budget-friendly models,” said Shilpi Jain, senior research analyst at Counterpoint.
According to Jain, Samsung’s M and F series in the below Rs 30,000 segment did not perform and there is a huge inventory build-up for that. “Samsung’s focus has been on value with premium phones rather than volumes in the mass segment, where the competition is very strong,” Jain said.
Currently, the below – Rs 20,000 segment, where Samsung is not focusing much, has a share of about 44% in the overall market. The entry-premium segment of above Rs 20,000 to Rs 35,000 has a share of 30%. The super-premium segment of over Rs 65,000 has a market share of 6%, led largely by Apple, according to IDC.
On growth of Chinese brands, Sanyam Chaurasia, senior analyst at Canalys, said, “Brands such as Xiaomi boosted their mid-to-high-end product lineup, driving volumes for the quarter with the Redmi Note 13 Pro series featuring refreshed colour offerings and the newly launched Xiaomi 14 Civi with its camera quality and distinctive leather design. Meanwhile, Vivo’s success in the mid-range market was driven by the V-series and Y200 Pro, focusing on refined design and camera features, along with increased push through LFR (large format retail) stores.”
Faisal Kawoosa, chief analyst at Techarc, said: “Undoubtedly, there is something called brand fatigue. Samsung needs to try something different based on consumer preference these days. They should launch a new series or sub-brands like Xiaomi’s Poco, Vivo’s Iqoo, etc, to be in the game.”
Kawoosa’s analogy for Samsung about a sub-brand launch or giving a distinct identity to its phones similar to say ‘iPhone by Apple or Pixel by Google’ is also referenced from the auto industry.
“Look at Kia, which is owned by Hyundai and how fast it has captured the market share in India. Launch of Kia was Hyundai’s strategy to avoid consumer boredom and capture the SUV market,” Kawoosa said, adding that Samsung should also think on these lines to remain relevant.
Besides the brand appeal, Samsung’s focus on mainline retail channels has also weakened lately with a fall in margins and bias towards online channels with price disparity and lucrative deals, mobile retailers said.
“Retailers continue to express dissatisfaction with margins as well as discrepancies in pricing and offers,” said Kailash Lakhyani, founder and chairman of All India Mobile Retailers Association (AIMRA), in a recent letter to Samsung.
“Immediate action is needed to increase margins and ensure price and offer parity in order to maintain retailer support,” he added.
