S7 China Pricing Strategy

Koh Dong-jin, president of mobile business at Samsung Electronics, introduces the Samsung Galaxy 7 and Galaxy 7 Edge at the Shanghai International Trade Center.
Koh Dong-jin, president of mobile business at Samsung Electronics, introduces the Samsung Galaxy 7 and Galaxy 7 Edge at the Shanghai International Trade Center.

 

Samsung Electronics is fighting an uphill battle in the Chinese smartphone market, and has made a surprising and aggressive decision to turn the tide. The smartphone giant will offer 20 percent discounts to early buyers of its new models – the Galaxy S7 and Galaxy S7 Edge – in China.  China will be the first market for Samsung Electronics to offer discounts on the Galaxy S7 series before the launch of the Galaxy models.

According to Phone Radar, an IT media company on March 9, the Korean electronics giant held an event to take the wraps off the new Galaxy S7 series in China on March 7. In the event, Samsung Electronics announced that it will offer 20 percent discounts on the new smartphones to early buyers.

In the Chinese market, the Galaxy S7 (32 GB) and the Galaxy S7 Edge (32 GB) were priced at 4,888 yuan and 5,688 yuan, respectively. Twenty percent discounts will lower the prices to 3,910 yuan and 4,550 yuan, respectively. Then, a discounted Galaxy S7 Edge will become cheaper than a normally retailed Galaxy 7 unit.

“Offering such discounts will play a bigger positive role in leading consumers to choose the Galaxy S7 series than offering free Gear VRs or wireless chargers,” Phone Radar said. “In the past, Samsung Electronics lowered the prices of new products several months after their launches so Chinese consumers waited for the prices to be marked down. This compelled Samsung Electronics to suffer sluggish sales of its new products in the early period. But the Galaxy 7 series will be able to enjoy stronger sales in its early period, as discounts will be offered in an early stage after its launch.”

This time, the sales performances of the Galaxy S7 will really matter to Samsung Electronics. Although Samsung Electronics had enjoyed ranking first in the Chinese smartphone market since 2011, the company fell below fifth place as Chinese makers such as Xiaomi, Huawei and Apple armed with the iPhone 6 overtook Samsung Electronics last year.

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