As Chinese brands suffer, Samsung powers up smartphone biz in India

Gains 10% share as disruption hits Chinese smartphone majors

Samsung climbed back to second position in India’s smartphone market during the June 2020 quarter — six months after losing the spot — clocking a market share of 26 per cent. Streamlining its delivery network and shifting focus back to the mass segment — at a time when competitors were struggling to restore normalcy in operations due to the pandemic — aided the firm's revival.

Once the market leader, Samsung has lagged China’s Xiaomi since late 2017. After holding on to second spot for two years, it lost further ground — to another Chinese major Vivo — in the December 2019 quarter.

The firm kept running out of power, slipping further to 16 per cent in March from 19 per cent in December. It recorded its lowest market share in eight years during CY19, at 21 per cent.

However, the outbreak and subsequent lockdown signalled a change in fortune. The supply chain disruption in China forced Xiaomi, Vivo, Realme, and Oppo to hit the pause button. Samsung, however, remained immune to the same, having wound up its manufacturing base in China last October.

According to Faisal Kawoosa, chief analyst at TechArc, Samsung stood to gain the most among original equipment manufacturers from the disruption thanks to its strong base in South Korea and Vietnam. “It could procure from Korea and other countries, resulting in low impact on its supply chain,” he said.

Further, being the only prominent player to register nine new handsets with the Bureau of Indian Standards (BIS) was a statement of intent, at a time when peers were deferring new launches. Xiaomi and LG were the only two major brands to register two models each.

People in the know said the move to realign focus on entry-to-mid-level handsets, which continue to drive over 90 per cent volumes in India, was a key factor.  

Samsung had launched a host of devices — Galaxy A series and Galaxy S series — during the March quarter; the former in the premium (Rs 30,000-50,000) segment, and latter in the ultra-premium (above Rs 50,000) category.

In last quarter, however, it has upped the ante with one entry-level smartphone (M01) and four mid-segment handsets (M11 and A21 variants). Since June, it has launched three new smartphones in the sub-Rs 10,000 category, with prices going as low as Rs 5,499.

Following the easing of the lockdown in early-May, it began activating physical stores — in integration with online and digital platforms — resuming business in all zones.

In a tie-up with digital marketing solutions firm Benow, the new scheme — internally called O2O — began integration of its digital and online platforms with physical outlets. Unlike the common omni-channel strategy, in which consumers get access to the online sales network for any product at physical stores, its new O2O scheme generated leads from online and serves them through offline stores.

“This will ensure buyers need not step out to physical stores. Also, the new platform enables thousands of physical retailers to connect with local customers online,” said Mohandeep Singh, senior vice-president, Samsung India.

According to Counterpoint Research, Samsung recovered the fastest in the quarter, capturing its highest market share in two years. It regained 94 per cent of the pre-Covid level in sales.

“Revamping the M-series and launching in offline channels, together with new schemes like Samsung Care+, helped the brand restore its position. Samsung has a diversified supply chain, which helped maintain a steady flow of components. It was the first brand to reach almost full manufacturing capacity by the end-June,” analysts at Counterpoint noted.