Samsung might have given up on its China operations, shutting down its last factory recently, but analysts feel the move could be advantageous for India. Even as the Korean handset-maker finds itself caught in a quicksand in the subcontinent, faced with similar intense competition from Chinese rivals, it could still emerge as head turner in 2020, said analysts.The company has begun responding to the market changes — by aggressively focussing on online and stepping up its premium game — albeit on a slow pace.
“Samsung already has deep capabilities in India — research and development, robust offline network as well as a wider product portfolio. With the company now gradually expanding its online presence, the only stumbling block, we believe it will come back stronger,”said Tarun Pathak, associate director, Counterpoint Research. To break through its stagnation, Samsung launched its M-series phones in India in February, which are available only online. With this specs-rich handsets at prices it never attempted earlier, Samsung has already sold over two million units till May.
A range of devices, priced between Rs 7,990 and Rs 17,990, targeted at millennial. “Samsung aims to double its online smartphone sales in India this year to USD 1 billion, driven largely by a new budget range of devices,” said Asim Warsi, senior VP, Samsung India. The company is also targeting business worth Rs 3,000 crore by selling another two million smartphones via the online channel before October 27.
For Samsung, its strategy is simple. It has a brand, which incumbents necessarily don’t have (yet), and it prefers to be more R&D focussed than indulging in price wars. Besides, Samsung move to end smartphone production in China is likely to see the company deepen its focus in India to turn its fortunes around.
Faisal Kawoosa, founder and chief analyst, techARC, said that the next few quarters could see Samsung regain its leadership in the market riding on festive sales and its focus on premiums — a segment that market leader Xiaomi is struggling with after Poco.
Also, the likes of Realme and OnePlus have been the fastest growing brands in the second quarter of 2019, but these brands are way too far to catch up with Samsung when it is already preparing to forsake its margins to price aggressively and gain market share. During the Amazon and Flipkart festive sales, for instance, one could see offers up to 25 per cent on Samsung mobiles in line with rivals Xiaomi, Realme and Oppo.
Pathak said Samsung is launching multiple series to target or expand into new product tiers. “This is helping them to expand their product portfolio to target multiple fast-growing segments and also diversify,” he added.Samsung shipments declined, however, it has shown 30 per cent growth on quarter driven by refreshed A series and M series, price cuts of older J series and higher channel incentives during IPL season. “Samsung remains strong in the premium segment,” said Pathak.