How Samsung has reshuffled its business to better focus on China

It has been a year since Samsung’s market share dipped below 1 percent in China. The company has apologized for its poor performance in the lucrative market and vowed to do more. Samsung mobile boss DJ Koh said that efforts would be made to transform the business into a “truly localized” Chinese company.

Samsung altered its entire corporate structure in China last month. More details on the changes that Samsung has made to the business there are mentioned in the report based on an internal document obtained by Caixin.

Samsung cuts the number of regional subsidiaries in China

The document reveals that Samsung has merged several of its regional subsidiaries and reduced the total number from 23 to 11. These subsidiaries will now be in charge of 28 regional teams. So it has merely cut the number of subsidiaries but increased the number of teams on the ground in China to better cover the market.

Samsung told the scribe that to improve the sales in each region, 11 people have been appointed to these subsidiaries that have proved their competence and performance in the past. Pan Ming, a spokesperson for Samsung China, said the move to 28 regional systems has been done to “strengthen operational efficiency in order to improve corporate competitiveness.”

This has thus been a de-facto consolidation of the business in China and there are concerns that it could lead to layoffs. Samsung has already cut production at its last smartphone plant in China and also laid off some workers.

The company has been working on these plans for over a year and it has seen some improvement in its fortunes. Samsung’s market share in China crossed the 1 percent threshold in the quarter ending March 2019. The Galaxy S10 has been very well received in the country. Will the Galaxy Note 10 be able to take the baton forward? Only time will tell.

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