Samsung’s Indian phone factory to have ‘limited impact’ on Chinese brands: expert

By Zhang Hongpei Source:Global Times Published: 2018/7/11 21:53:40

South Korean tech group Samsung and Chinese vendors are all betting on India, one of the fastest growing smartphone markets in the world. But Samsung's new mobile phone manufacturing plant in the South Asian country, its biggest mobile phone plant in the world as reported, will only have a limited impact on its Chinese competitors, Xiaomi in particular, said an expert.

The new plant located in Noida, on the outskirts of New Delhi, was inaugurated on Monday. It will help Samsung gradually double its current annual production capacity in India from 67 million phones to 120 million in the next three years, according to a report by the Times of India.

Various players have already made inroads to bet on the lucrative smartphone market in India. Chinese brand Xiaomi became the top seller in the country, accounting for 25 percent of Indian smartphone sales in the last quarter of 2017, overtaking Samsung's 23 percent, according to consultancy Counterpoint Research.

Data from the IDC showed in May that Xiaomi secured the top spot in terms of market share in India with 38.4 percent in the first quarter of this year, trailed by Samsung with 10.4 percent. Two other Chinese smartphone vendors, Oppo and Vivo, followed behind with 7.9 percent and 6.0 percent, respectively.

Sun Yanbiao, head of Shenzhen-based research company N1mobile, told the Global Times Wednesday that Samsung has lost smartphone market share in China as domestic brands like Xiaomi, Huawei and Oppo have quickly grabbed the market with cheaper prices, better quality and strong marketing.

"I think the Indian plant indicates Samsung's intention to take root deeply in the country. At the same time, it seems like a retreating approach under the pressure of rising Chinese players by transferring its once major market to India, where the population dividend is being gradually released," Sun explained.

Xiaomi and Oppo declined interview requests from the Global Times to comment on the issue.

At present, around 60 percent of mobile devices in India are old-fashioned feature phones, which are basic phones with minimal data usage capacity, while the remaining are smartphones, said Sun.

"The competition between Samsung and Xiaomi mainly focuses on the smartphone sector, where low-end smartphones with cheap prices are likely to be fiercely competitive market territory," said Sun, adding Samsung's new plant in India is likely to have some impact on Xiaomi's sales in terms of brick-and-mortar store sales.

"For e-commerce sales, Xiaomi will continue to play a leading role," he noted. Xiaomi has currently built six factories in India.

Kapil Kinariwala, head of 3KSL Transport, a logistics company based in Indore, India, told the Global Times Wednesday that he would choose Xiaomi or Oppo over Samsung if the alternatives were close in price.

"Because for the same price level, Samsung will not offer the same features as the other two. But if you want a premium category, definitely Samsung has an edge," he said.

Another Indian citizen surnamed Shawaiz, who was using a Huawei smartphone, told the Global Times Wednesday that given the same choice, he would pick Samsung because of the brand name.

Market researcher Strategy Analytics predicted that Indian smartphone sales will exceed 200 million units by 2022, nearly double the 126.8 million units sold in 2017. Sun said the current Indian smartphone market is similar to that of China's back in 2008, when foreign brands could easily grab a piece of the pie.

Posted in: ECONOMY,COMPANIES

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