BUSINESS

[News Focus] Samsung hopes to regain consumer confidence in China

By Shin Ji-hye
  • Published : Sept 14, 2017 - 18:23
  • Updated : Sept 14, 2017 - 18:23
Amid struggles in the Chinese market, where users are increasingly attracted by local alternatives, Samsung Electronics underlined that China is and will continue to be the most important market for its smartphone business.

“We will continue to make efforts to gain trust and love from Chinese consumers with Samsung’s technology and products,” said Samsung’s mobile head Koh Dong-Jin at the launch event for the Galaxy Note 8 in Beijing on Wednesday.

His announcement came amid the Korean tech firm’s weak sales in the nation. 

Koh Dong-Jin at the launch event for the Galaxy Note 8 in Beijing (Yonhap)

Samsung’s market share in China has dropped to as low as 3 percent this year after grabbing the top spot with around 14 percent in 2014, according to the US research firm Strategy Analytics.

“Samsung’s glory days in China are almost over due to rising Chinese handset makers with quality products and consumers’ brand loyalty,” said Kim Jong-ki, a researcher specializing in the mobile industry at the Korea Institute for Industrial Economics & Trade.

Eight Chinese phone makers, including Huawei, Oppo and Vivo, now hold a more than 70 percent market share in the nation. In June and July, Huawei beat Apple to become the world’s largest smartphone maker by sales, according to the US market research firm Counterpoint Research.

Amid weak sales, Samsung has cut around 20,000 jobs in China over the past two years and replaced the head of its Chinese unit in spring.

Still, China is too big for Samsung to give up, industry watchers said. Although Samsung may not be able to recapture its glory in the nation’s budget smartphone market, its premium market is too attractive to give up.

“China’s rich class -- although it makes up a small portion -- still constitutes a large number. Samsung pins its hope on the higher value-added market,” said Lee Byung-tae, a professor of KAIST College of Business.

China’s rich -- estimated to make up around 5 percent of the total population -- still represents 650 million people, more than 10 times the population of Korea.

“In order to stand out from the competition with Apple in the premium market, Samsung should provide better pricing policies (discount and subsidy) and customized services,” Lee said.

For the Note 8 release in China, Samsung has partnered with Chinese mobile payment services, WeChat Pay and AliPay. It also worked with China’s bike-sharing company, Mobike, allowing the Note 8 users to use the bikes simply by scanning a QR code.

The price of the Galaxy Note 8 starts at 6,988 yuan ($1,066) for the 64-gigabyte model, while the price of Apple’s upcoming iPhone 8 is estimated to start at 5,888 yuan and the iPhone X at 8,388 yuan.

By Shin Ji-hye (shinjh@heraldcorp.com)