Samsung’s fight against Dragon for dominance

South Korean technology giant Samsung, which is locked in a fierce battle with its Chinese rival Xiaomi to gain upper hand in the Indian smartphone market, is leaving no stone unturned to retain its top position. The company recently toppled Xiaomi to regain its top position in the second quarter of this year, with 29% market share, thanks to a slew of measures taken by the company. Its market share in the first quarter was 26.2%, according to Counterpoint’s Market Monitor service.

From inaugurating the world’s largest mobile factory in Noida in July this year to opening a mobile experience centre at Bengaluru’s iconic Opera House recently, the brand is committed to India and is innovating itself with new products to attract younger customers and retain its top position in the country.

Xiaomi’s market share in the second quarter of this year was 28%, whereas, it was 31.1% in the first quarter. While Vivo is at the third position with 12% market share, OPPO is at the fourth position with 10% market share. According to market research firm Counterpoint, Samsung’s 29% market share was due to strong performance of models such as Galaxy J6, Galaxy J2 2018 and Galaxy J4 focusing on the budget segment. While Xiaomi Redmi 5A has 9% market share, followed by Xiaomi Redmi Note 5 Pro at 6%, Samsung Galaxy J6 enjoyed 5% share during the second quarter.

Chinese handset maker Xiaomi, over the last couple of years, has emerged as a most sought-after brand for smartphones in the lower priced products category. It gained upper hand in the smartphone sales in two out of three quarters over Samsung. It has been quietly launching a wide range of smartphones and non-smartphone products as well. The company, which has lost a sizeable market share back in Dragon Land (China), is aggressively focusing on Indian market to take a leadership position.

Opera House

After opening the world’s biggest phone manufacturing factory in Noida, Samsung is betting big on India and does not want to let go of the opportunity as it seems to have learnt a lesson from its experience in China and the US, where it lost the plot to local companies and Apple respectively.

In Bengaluru’s upmarket Brigade road, Samsung recently opened the 33,000 sq feet standalone property – Opera House – (earlier a cinema theatre) which was restored over two years. It gives differentiated product experiences, from Virtual Reality to Artificial Intelligence and Internet of Things, among others.

“When we finalised on the Opera House project in Bengaluru, we did not want to change a thing but only enhance it with the technology. We wanted a nice interplay between the new world of technology, innovations, culture, art, entertainment and socialisation. With Opera House, Samsung wanted to bring all the elements under one roof for people to have a different kind of experience,” says Mohandeep Singh, Senior Vice President, Mobile Business, Samsung India. Samsung Opera House is aimed at becoming an innovation, lifestyle, entertainment and culture hub of Bengaluru with events being organised around fitness, photography, gaming, music, movies, food, stand-up comedy, technology and startups.

While it is the world’s largest mobile experience centre, Samsung has also showcased its other technologies and consumer products, like refrigerators, televisions, home theatre systems and audio products, among others. The experience centre has technologies on showcase such as AI, IoT, VR, and the largest range of its accessories with an option of customisation. “Over the last one month, we have seen tremendous love from people for the Opera House and there has been a steady stream of visitors from all walks of life. Many are coming to re-live Opera House and also get a peek into the technology inside while tech enthusiasts are thronging the space to check out the latest in technology. In our first month, we have hosted several events such as classes on how to use your microwave to cook and photography workshops using our flagship device Note 9,” Singh told DH.

Samsung plans to set up such mobile experience centres at the top 10 metro cities in the country, clearly indicating its intention to retain top position in the country across different categories. However, it said that it is not yet decided whether the centres will be launched at heritage buildings or not.

“The shape, size and execution will be localised to the kind of property or the kind of space that we get. The idea remains the same as we want to have such spaces where interaction between consumers and the brand becomes richer from what we have done so far,” Singh says, adding Bengaluru is a city where it has invested for a long time. In 1996, Samsung opened its first R&D centre in Bengaluru, - Samsung R&D Institute, Bengaluru (SRI-B), which is its largest R&D centre outside Korea. SRI-B has been contributing to global products as well as local innovations under Samsung’s ‘Make for India’ initiative. In India, Samsung has two manufacturing facilities (Noida and Sriperumbudur, near Chennai), five R&D centres and one design centre.

Doubling its capacity

When Samsung opened its new mobile manufacturing plant in Noida, it said the new plant is a testament to its commitment to the Indian market. With this new facility, Samsung will double its current capacity for mobile phones in Noida from 68 million units a year to 120 million units a year, in a phase-wise expansion that will be completed by 2020.

The Noida factory, which was set up in 1996 is one of the first global electronics manufacturing facilities set up in India. A bigger manufacturing plant, spread over 129,000 sq. metres, will help Samsung meet the growing demand for its innovative products and services across the country. “Our Noida factory, the world’s largest mobile factory, is a symbol of Samsung’s strong commitment to India, and a shining example of the success of the Government’s ‘Make in India’ programme. Samsung is a long-term partner of India. We ‘Make in India’, ‘Make
for India’ and now, we will ‘Make for the World’. We are aligned with Government policies and will continue to seek their support to achieve our dream of making India a global export hub for mobile phones,” HC Hong, CEO, Samsung India had said during the opening of the mobile phone factory in Noida.

All Samsung mobile phones, including the flagship Galaxy S9, S9+ and Galaxy Note8, are made at the Noida plant, the company said.The major strength of Samsung is it’s a strong offline player, while Xiaomi largely dependent on online channels. Xiaomi is currently present in 43 cities in the offline space and in 40 of those cities it has emerged as a number one seller. A strong R&D and expansive retail network with over 1,80,000 retail partners and 2,100 Samsung brand stores spread across the country are other plus points for Samsung.

However, challenges ahead of Samsung are plenty as it has to fight out a large number of online players who are flooding the Indian market and it still needs to build a strong online sales network. Apart from fighting out Xiaomi in the lower price bracket, Samsung is facing competition from another Chinese player OnePlus, which is giving a tough fight in the premium smartphone segment in India.