Samsung has retained its number one position in the Indian smartphone market without much trouble. But China-based smartphone vendors in India, led by Xiaomi, have threatened the company’s dominance. Xiaomi entered the Indian smartphone market in July 2014, and has experienced incredible success in the country. Its market share has grown exponentially — it tied with Samsung for the top spot in the Indian smartphone market at 23.5 percent market share in Q3 2017, according to IDC. It sold 9.2 million smartphones in that same quarter, and its phones have become bestsellers in the region.
It’s no surprise that Samsung sees Xiaomi as a major threat, and a report by The Economic Times suggests the struggle between Samsung and Xiaomi will spill over to India’s e-commerce space in 2018 as the former seeks to take the lead.
The Economic Times, quoting three unnamed industry executives, reports that Samsung India will launch a new series of smartphones this year exclusively for online audiences, They’ll have impressive hardware specifications and focus on the Rs. 5000-15,000 price bracket ($79-$236), according to the publication, which appeals to younger consumers.
Samsung has its work cut out for it. Almost half of the smartphones purchased online in India are made by Xiaomi, and the top three smartphones sold during Q3 2017 in India were made by Xiaomi, according to The Economic Times. According to Counterpoint Research, Xiaomi’s success in the Indian smartphone market can be attributed to its lack of competitors in the online space — has almost 50 percent share of online smartphones sold in India, according to Xiaomi India Managing Director Manu Kumar Jain.
Samsung sells the Galaxy On series of smartphones exclusively online, and launched the Galaxy A8+ (2018) as an Amazon India exclusive last week. The Galaxy A8+ (2018) is priced at Rs. 32,999 ($520), positioning it to compete with Xiaomi’s flagship Mi Mix 2.
Samsung’s reducing the number of trade partners responsible for fulfilling online orders to 2-3 from 10-12 in each region, which will help it to manage sales better, according to The Economic Times. An industry executive was quoted as stating that the layers of distribution for Samsung’s sales are also being cut to ensure margins are better controlled, which will allow the company to price its devices more aggressively.
Our view: Samsung has long been criticized for releasing phones which can’t compete with China-based OEMs with respect to value. If the company’s plan to increase competition online in India, that’s a good thing — competition could be a good thing for consumers.
Source: The Economic Times
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