The second war between Samsung Electronics Co. and Chinese smartphone manufacturers, such as Xiaomi, Huawei, Oppo and Vivo, for the Indian market to win the 1.3 billion population has just begun. Samsung Electronics had the largest share of the Indian market until last year. However, the company had been unseated from the number one position in the first quarter due to Xiaomi’s US$100 smartphone.
As Samsung Electronics has opened the world's largest mobile phone manufacturing factory in Noida, its outpost for the Indian market invasion, on July 9 (local time), the second war is highly likely to enter on the new phase. With the expansion of the Noida plant, Samsung Electronics has set a foundation that can effectively target the Indian low-priced smartphone market priced at a US$100 level. The Noida plant now has improvement in production from 6.7 million to 120 million mobile phones a year. Samsung Electronics has secured two advantages by expanding its outpost. The company can flexibly control the local productions through the Noida factory. It has also removed 20 percent of export tax barriers.
According to market researcher Counterpoint Research, low-priced phones in range of 10,000 to 25,000 rupee (US$145 to 363 or 162,300 won to 405,750 won) sells the most in the Indian smartphone market. The low-priced market grew as much as 49 percent last year alone. Xiaomi, Oppo and Vivo put up a good show targeting the market with the US$100 phone strategy. Xioami’s Hongmi Note 5 was the best-selling smartphone model in India in the first quarter. The model with the lowest storage capacity was sold at 9,900 rupee (US$144 or 160,677 won). The RealMe, the low-priced smartphone model of Huawei, was also sold at 9,900 rupee (US$144 or 160,677 won) to target Indian consumers.
Samsung Electronics is more likely to target the Indian market with its low-priced Galaxy J Series. The company introduced the Galaxy J7 Duo and the Galaxy J6 in the Indian market and is to release the Galaxy J8 this month. The new model is priced at around 15,000 rupee (US$218 or 243,450 won).
Samsung Electronics is planning its strategy to popularize its mobile payment service and artificial intelligence (AI) Bixby voice assistant service after mobile phones. India carried out currency reform in November last year. It withdrew 500 and 1,000 rupee notes, which accounted for 86 percent of the total currency in circulation, and changed to new currency notes. Since then, the mobile payment market has been rapidly growing.
An insider from Samsung Electronics said that the company is even considering reorganization of the IT & Mobile Communications (IM) division in order to aggressively target the Indian market. Currently, the AI developer and big data division has been transferred from the service business to the development department. This is to make its simple payment service and AI-powered Bixby 2.0 service popular in the Indian market based on popular low-priced smartphones.