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October 18, Thursday 2018 5:45 AM       

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       Samsung borrows from Chinese playbook in battle for India's smartphone market
 
         Posted on :17:57:34 Aug 1, 2018
   
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       Last edited on:18:02:02 Aug 1, 2018
         Tags: SAMSUNG, samsung india
 

MUMBAI: Sometimes keeping ahead of the game means learning some tricks from rivals - a strategy Samsung Electronics Co Ltd hasn’t been too proud to adopt in India where Xiaomi Corp and other Chinese brands have made hefty inroads. Pages pulled from their playbooks include becoming savvier with online marketing to millennials as Samsung seeks to reinvent itself as a ‘younger brand’, as well as providing sales staff for smaller stores and even finding a new love for cricket with a sponsorship deal.

Combined with a slew of new models - many aimed at undermining Chinese dominance of the $150 to $300 phone segment - the new tactics are paying off with the South Korean tech giant reclaiming the No. 1 spot in the second quarter.

“Samsung was living in a sort of denial of the threat that Xiaomi, Oppo, Vivo posed but now they’ve come out of the ostrich hole,” said Rushabh Doshi, research manager at industry tracker Canalys. “Now they are fighting back, definitely.” 

Its Galaxy J6 launched in May and the J8 sold from July have been doing especially well, each selling 50,000 a day, says Samsung. In an appeal to millennials, the phones have a new “chat over video” feature which allows users to view videos without interruption even as they chat by text due to a transparent keyboard.

To be sure, Samsung has long dominated the premium end of the smartphone market in India and features like “chat over video”, designed at its Indian R&D centre, underscore its tech prowess. It has also built up a wide retail network in the country.

But Samsung, which logged slower profit growth in April-June, knows it has to pull out the stops in India if it wants to avoid harsh lessons meted out in China.

Just five years ago, it had 20 percent of the Chinese market only to see that fall to less than 1 percent this year, outgunned by Huawei, Xiaomi, Oppo and Vivo, particularly on pricing.

And India is too big a prize to lose - the world’s No. 2 smartphone market with about 400 million users and worth an estimated $20 billion annually.

It’s also the world’s fastest-growing major mobile phone market, expanding about 20 percent last quarter from a year earlier. For Samsung, India is its biggest market outside the United States and one where it has invested heavily, opening the world’s biggest smartphone factory outside New Delhi last month.

But Chinese brands now account for every one in two phones sold in India with Xiaomi making the greatest strides. After its 2014 market entry, the “Mi” brand steadily gained share to knock Samsung from the top spot last December.

Although Samsung regained the title last quarter, it was only by a hair’s breadth - 29 percent market share to Xiaomi’s 28 percent, according to research firm Counterpoint. Samsung started selling three new phones in the quarter while Xiaomi had one product release.

Samsung’s India unit did not respond to a request for comment on its strategies in the country.

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       BUSINESS
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