Samsung Electronics' smartphone business was put on emergency alert. This is because the company lost its number-one spot in the Indian market, the second-largest smartphone market in the world after struggling in China which is the world’s largest smartphone market. In particular, the Indian market emerged as the second largest market in the world, surpassing the US last year as a representative emerging market of smartphones.
According to Counterpoint Research, a market research company on January 28, China's Xiaomi took the top spot in the smartphone market in India in the fourth quarter of 2017 with a market share of 25%, outclassing Samsung with 23%. Samsung lost the top position in the Indian market in six years. Half of India's smartphone market has been occupied by small Indian companies and Samsung has maintained its position as the top seller with a quarter of the market.
However, the rapid rise of Xiaomi has changed the situation since last year. In the first quarter of 2017, Xiaomi’s market share stood at 13%, not reaching half of Samsung Electronics' 27% in the first quarter of the year, but after that, Xiaomi quickly expanded its market share to 16% and 22%. Currently, Chinese manufacturers such as Xiaomi, Vivo, and Oppo are aggressively tapping into the Indian market, creating a rivalry between Samsung and Chinese brands.
Samsung Electronics's market share decline is reminiscent of its experience in China. The Korean smartphone giant ranked first in the Chinese smartphone market with a market share of 19% in terms of shipments in the first quarter of 2014. However, in the third quarter of 2017, its market share plummeted to 2%. Some experts even made a gloomy forecast that its market share might stay at the 1% level.
Chinese makers such as Huawei, Oppo and Vivo have attracted the Chinese market with budget smartphones. In the case of the Chinese market, there is a great gap between urban and rural areas, so it is necessary to establish a distribution strategy and marketing for each region. In this regard, Chinese companies excelled.
Samsung Electronics, feeling a sense of crisis, is also making strenuous efforts to stop and turn the tide. One good example is the launch of the Galaxy On7 specialized for the Indian market. The Galaxy On7 model with a 4GB RAM and a 64GB internal memory retailed at 14,990 rupees (approx. US$225) and the Galaxy On7 model with 3GB of RAM and 32GB of internal memory showed Rs 12,990 (approx. US$198). In addition, Samsung Electronics is planning to revert to first place after riding out the crisis with customized strategies such as strengthening online distribution channels in India.