Efforts to Retake
South Korean smartphone makers, such as Samsung Electronics and LG Electronics, are gathering up their reins to retake the Chinese market again.
Samsung Electronics, which ranked first in the Chinese market three years ago, recently dropped out of the top 10 and LG Electronics is barely holding on with less than a 1 percent market share. This is largely due to the fact that smartphone technology has been leveled off and Chinese smartphone producers are rapidly growing in the market. In addition, South Korean companies are having difficulties in competing fairly with local companies due to the Chinese government’s blatant support for local companies.
However, China is the market they cannot give up. Currently, Chinese consumers account for 30 percent of the global market and China is a huge market that will continue to grow in the future. In fact, companies cannot maintain the leadership in the global market without the Chinese market. Accordingly, domestic smartphone manufacturers are strengthening their localization strategies to gain more influence in the Chinese market and developing Chinese specialized products to win Chinese customers.
According to a major global market research firm on May 14, foreign smartphones are rapidly losing their ground in the Chinese market in the first quarter.
Samsung Electronics ranked eighth in terms of market share with 3.1 percent. The company maintained the number three spot in the Chinese smartphone market with a 7.6 percent market share in 2015 and 4.9 percent in 2016. LG Electronics came in 26t with a 0.045 percent market share in China in the first quarter. Apple’s iPhone also saw its sales decrease as much as 15 percent with a 7.7 percent market share in the first quarter compared to the same period a year ago.
Foreign smartphones are struggling due to the rapid growth of Chinese companies. Huawei, the No.1 player in the Chinese market, ranked first in terms of market share with 18.9 percent in the first quarter, followed by Oppo with 18.7 percent and Vivo with 16.8 percent.
Counterpoint Research said, “Oppo and Vivo, which follow Huawei, show a remarkable growth and the three companies are strengthening their leads in the market, surpassing Apple, Xiaomi and Samsung.”
First, Samsung Electronics plans to focus on strengthening its localization strategy in the short term. An official from the company said, “We will launch the Galaxy S8 in China by the end of May and support a Chinese language for its artificial intelligence voice assistant Bixby. In particular, we will actively establish a partnership with Chinese content producers to expand our services further so that Chinese consumers can enjoy more services on the Galaxy.”
LG Electronics also plans to target the Chinese market again through its online distribution networks. In China, global companies have difficulties in building their offline distribution networks because it costs too much due to a large size of the country.