What could the leadership reshuffle mean for Samsung in India?
On New Year’s Eve, South Korean Samsung announced a major reorganization of its Indian leadership. The rejig follows an organizational overhaul of its Korean parent company and comes against the larger backdrop of the growing competition Samsung faces in India and around the world.
In India, competition from Chinese players has intensified in the smartphone segment. Smartphone shipments to the country have maintained strong momentum and the Chinese are rapidly gaining market share in the non-premium smartphone category. Demand has increased dramatically on online sales channels, especially after the covid-19 epidemic.
According to the latest research from Counterpoint’s Market Monitor, Chinese brands together succeeded in securing 74% of the Indian smartphone market share in the third quarter of 2021. Xiaomi maintained its leading position with 22% of the share, while Samsung was in the lead. second place with a 19% share. Vivo (15%), Realme (14%) and Oppo (10%) – all Chinese – are proving to be aggressive competitors. The numbers suggest that Samsung will have to sweat it out to secure and expand its position in the smartphone segment. Others like the Transsion Group and OnePlus are also growing and cannot be taken lightly. Market Monitor studies show that the two companies saw robust growth in the third quarter – 72% and 55% – respectively.
For Chinese brands that don’t have a large in-store presence, the pandemic appears to be a blessing, with online channels capturing around 55% of total smartphone shipments to India during the third quarter. Smartphone shipments in the third quarter had crossed the 52 million mark.
Added to Samsung’s headaches is Apple, which is seeking to strengthen its presence in India in the high-end segment of the smartphone market. Apple grew more than 200% year-on-year in the third quarter, taking the leading position in the premium (above Rs.30,000 price point) and ultra-premium (over Rs.45,000) segments with a share of 44% and 74%, respectively.
Despite political calls to boycott Chinese imports following a border dispute and lingering tensions, Chinese brands are attacking South Korean Samsung. So it’s no surprise that Samsung wants to push its Indian leadership not only to reverse the lost market share, but also to get ahead of the competition. The new chip manufacturing plant it is building in Texas and the investments it is making in chips and biotech are all part of the global drive to win back lost markets.
Samsung’s troubles began when its de facto leader Lee Jae-yong, also known as Jay Y. Lee, was jailed in a corruption case. He was recently paroled after serving more than half of his two-and-a-half-year sentence. Soon, Samsung launched a corporate restructuring. The electronics giant’s mobile and consumer electronics businesses are merging into a single entity. In addition to this, there will be a component division. From three verticals earlier, it has cut its business divisions in half. India’s rejig occurred against this backdrop of increased synergies and Lee’s willingness to take full control of decision-making.
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