Samsung apologizes for poor performance in China, vows to do more
Samsung was once the dominant player in China, the most lucrative smartphone market on the planet. However, not only did Samsung lose its lead in the country but its market share in China is now in the low single digits. Samsung predicts a reversal in its fortunes in this key market as it acknowledged today that it had failed to fully understand China’s retail and commerce customs earlier. He previously said that Samsung will continue to make efforts to grow as a “truly localized” Chinese company.
Head of Samsung’s mobile division DJ Koh apologized to shareholders for the falling market share in China at the company’s annual shareholders meeting today. He said that China is a more complicated market and that Samsung is now trying different approaches to bring in new customers.
Samsung’s market share in China is less than 2 percent
It’s mission-critical for Samsung in China as its market share dropped below 2 percent in the fourth quarter of last year. Not one Samsung handset could make it on the 2017 list of bestselling smartphones in the country. It has almost been driven out of the market by Apple in the high-end segment and local manufacturers who have not only captured the premium segment but also dominate the mid-range and low-end segments. These manufacturers have also proven to be a headache for Samsung in key markets outside China.
Samsung decided to make some organizational changes to its China division in September last year in a bid to reignite growth. It streamlined operations and replaced the local chiefs but it might be a while before the results of these actions, positive or otherwise, become visible.
The company said during the Galaxy S9 launch in China two weeks ago that its strategy for the country now involves more focus on customers that are willing to purchase premium handsets. It has also inked partnerships with local service providers such as Mobike, Alibaba, WeChat, Baidu and others to provide enhanced artificial intelligence features and additional IoT-based services to customers in the country.
It remains to be seen, though, if these measures pay off. Given the sheer size of the Chinese smartphone market if Samsung is able to regain some of its lost market share it would only help cement its position as the top smartphone vendor in the world even further.
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Good luck to Samsung.
They need to make sure that they are able to have a different ecosystem only for China (since they can’t rely on Google because it’s banned in China), similarly to Xiaomi that has a fully matured ecosystem. Unless they achieve that I don’t see them doing the slightest change in their shrinking market share. Also these pricetags are a no-no. They need to do something about that too.
Don’t worry, on how Samsung works, every phone is its own ecosystem (that’s why they are called Galaxy – every one is a parallel Galaxy to the other …); so they will do quite well in China with your proposal. No consistency whatsoever (that’s where the fruit outsells them any day, not much features, but consistency throughout the entire ecosystem since their first product) … been with Samsung since Galaxy Nexus S (the 2nd Google Nexus, year 2010), on the high end phones. Finally bailed on Samsung, since my last device died, which I decided to keep on the long… Read more »
I would say they have to sell their products at at most 2/3 of the original price for a year as well as promising their Chinese phones to get updated as fast as in Europe to actually regain their original customers back.
Bought a Chinese Galaxy A8 (SM-A8000), and it got marshmallow over 6 months later than the European SM-A800F. Now I switched to the European Galaxy S9+ (SM-G965F) and never look back to the Chinese models, even though I have to pay a lot more to get it.
They won’t gain much in china with their current offering and price structure. Not everyone in China are rich and their general average wage is very low compared to likes of EU and USA. They are very spec conscious and seeing the s9 only with 4gb ram and single camera as something that is very 2016 tech. Most Chinese OEM has dual camera and 6gb ram set up but nearly 1/2 the price. Samsung mid range phone is very confusing and spec wise doesn’t match that of the Chinese phones. Plus are generally more expensive. Coupled with the fact that… Read more »
Won’t take long for the situation to be the same in India if they don’t focus much here as well
Rather keep the price a little less and get more people to buy the phone than charge such a huge amount for not worth an updated phone which doesnt even feel like worth the money and also provide proper softwear support and extended android updates for starters
The main reason I see is poor resale value & large number of important phones from US , as they are very cheap S8+ is around $400- 500 these days a 10/10 one . Note 5 is barely $220 .
Imagine a premium device like note 5 for $220 & IPhone 6 16gb still sells for $250+