The Chinese smartphone market is currently led by Huawei, followed by Oppo, Vivo, Xiaomi and Apple. Samsung is not in the top five smartphone manufacturers in the market, as the company has been struggling for a while in the country.
Chinese OEMs like Oppo and Vivo have outperformed Samsung in offline retail sales, while Xiaomi retains its dominance in online flash sales, squeezing out Samsung from both ends. What makes the situation worse is that in the premium price segment, consumers in China prefer smartphones released by Huawei or Apple instead of Samsung's flagships like the Galaxy S8.
In Q3, Samsung ranked ninth in China, the world's largest smartphone market, according to a report by the research firm. It had 2% share, which was significantly behind Huawei's market share as the leader, and Apple's market share in fifth position. Huawei and Apple are the two major global competitors for Samsung, and both of them are ahead of the company in China by a wide margin.
This situation is not going to improve soon for the company. In fact, it is predicted to get worse. A new report by Strategy Analytics states that Samsung's market share in the Chinese smartphone market will drop to below 2% in Q4 2017.
The report predicts that Samsung's market share will further drop to 1.6% in Q4. The company was once the dominant player in China with 20% market share, but its share of the market has gradually declined over the years with the rise of Huawei, Xiaomi, Oppo and Vivo. The report mentions that the combined share of these four companies stood at 66% during Q3, though the figure is "predicted to decline to 57.3% in [Q4] due to Apple's upcoming iPhone X".
It is also worth noting that Samsung has cut around 20,000 jobs in China over the past two years. The company also replaced the head of its Chinese unit in Spring amid weak sales.
On the other hand, Samsung's arch rival Apple was the only foreign brand in the top five in China, according to the report. The company had 7.2% market share in Q3 but the report mentions that the figure is expected to rise to 10.7% in Q4 due to the iPhone X.
Our take is that in order to recover in the Chinese smartphone market, Samsung will have to launch new products with affordable prices in the budget end to take the fight to Xiaomi. In the mid-range, it would need to outspend and outclass Oppo and Vivo's marketing programs in offline retail. Finally, in the high-end, the company would have to use all its energy and resources on convincing consumers in China to choose Samsung flagship smartphones over their Huawei and Apple-branded competitors.
Via: The Investor
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