It’s been a troublesome few years for Samsung within the Indian handset market, the place it has struggled to maintain tempo with or beat again competitors from Chinese rivals similar to Xiaomi, Vivo and Oppo. The first indicators of vulnerability got here when Samsung misplaced the smartphone crown to Xiaomi within the September quarter of 2017. In October-December 2019, it was pushed to No. three in smartphones by one other Chinese participant, Vivo.
In the identical quarter, Samsung additionally misplaced its prime place within the general market – smartphones and characteristic telephones – to Xiaomi, after some 9 years on the prime. Xiaomi although solely sells smartphones. Meanwhile, Oppo and Realme are respiratory down its neck.
According to analysts, Samsung wasn’t as nimble as its Chinese rivals and couldn’t benefit from the growth within the on-line phase. They nevertheless added that Samsung can bounce again, given its investments in know-how and native manufacturing, the fame of its units and the deep penetration of the offline cellphone market. It’s the one main handset firm to manufacture from the bottom up in India.
“The gaps in Samsung’s portfolio have provided opportunities for other smartphone brands, especially new market entrants, to strategise, spot the gaps, and leverage market opportunities,” mentioned Prabhu Ram, head of the trade intelligence group at CyberMedia Research (CMR).Faisal Kawoosa, founder and principal analyst at analysis agency TechArc, added that Samsung’s “brand arrogance has caused it to grossly underestimate the marketing potential of the Chinese companies who have now created a niche in almost every price segment. And, of course, their exclusive channel strategy has failed them too.” Other components embrace brand fatigue amongst patrons excited by the choices of newer manufacturers, mentioned market watchers.
“Samsung must shun its brand arrogance at a time when other competitors are winning in their brand messaging, especially on digital media,” mentioned Kawoosa. “Samsung is nowhere close to social media marketing by its Chinese counterparts.” Samsung didn’t reply to ET’s queries. But the corporate isn’t like others that didn’t put money into know-how and have been vanquished by Chinese entrants, mentioned an individual aware of Samsung’s technique, declaring that it has up to now invested $10 billion in India.
Noida is the corporate’s largest manufacturing facility on this planet and Samsung has one among its finest R&D centres in Hyderabad, the individual mentioned.
As India’s smartphone market slows, analysts mentioned Samsung wants to ramp up its technique in three areas— worth factors, gross sales channels and advertising. They level out that the corporate had fended off competitors from the likes of Asus, HTC and Blackberry early on.
“Samsung has technological leadership in foldable smartphones and holds the edge with its new premium 5G and 4G offerings,” Ram mentioned. “Lastly, it has a deep mastery of the offline market segment that is critical to fuel the next wave of smartphone growth. Samsung’s Make in India moves also enable it to offer more India-specific customizations for Indian consumers and roll out new offerings swiftly.”
Analysts count on Samsung to regain some misplaced floor by making the most of the disruption within the Chinese provide chain due to the Covid-19 outbreak. Samsung has lined up 9 new launches in early 2020 as per knowledge from the Bureau of India Standards. Most of Samsung’s opponents are diversifying by way of merchandise and channel technique, mentioned Tarun Pathak, affiliate director, Counterpoint Market Research. “Samsung also needs to do that, if they have to reclaim some of the lost share,” he mentioned.
Samsung reoriented and strengthened its product portfolio final 12 months, launching the M and A sequence of smartphones focusing on worth-for-cash patrons. The first was aimed toward on-line patrons and the second on the offline market. “Of the new product offerings, smartphone models such as A50 and M30 did perform well for Samsung,” Ram mentioned. “While Samsung was able to build inroads into the online segment, it ceded some space for brands such as Vivo in the offline segment.”
In its bid to succeed on-line, it hasn’t dealt with the offline channel too effectively, mentioned Navkender Singh, analysis director at International Data Corporation (IDC). Offline contributes greater than 55% to gross sales, he mentioned.