HomeNews5 Reasons why winter has not brought good news for Samsung

5 Reasons why winter has not brought good news for Samsung

The recent claims, and counter claims on market share, irrespective of the truth, donot augur well for the market leader

That Samsung has had a fantastic run in the mobile handset space is undeniable. In fact, it would be no exaggeration to state that like the category itself, Samsung’s amazing success in the handset category propelled it to the top of the heap in the overall consumer durables space, as the rest of its products fed on the success and brand recall of the mobile brand in recent years.

In recent polls conducted by TMI for the DeviceWorld Awards 2017 or this year, we were surprised to see the relative ‘weakness’ of its presence in other categories even as the mobile division enjoyed tremendous recall. That, however , is where the good news might be ending for the brand.

While the news reports quoting from Counterpoint research, a Hong Kong based research firm with an office in India that tracks mobile sales indicated that the market leader has slipped all the way down to number 3, Samsung has rejected this forcefully, by quoting its own figures from another well known research agency GFK from Germany, no less. But we believe the signs are all there to indicate that Samsung is indeed struggling to retain market share, and more importantly, protect its market leadership. The reasons for that could be many, but here are 5 that we can point to, based on our market observations, as well as a reading of this category over the years.

Reason 1:Large means slow

Ever since Motorola shifted the industry decisively by going for an online-only sales model through its tie-up with Flipkart in November 2015, the industry has never been the same. The established norms of giving cursory attention to online sales, even while nurturing real estate in the form of strong offline channels are falling apart, at a speed that has surprised even the most seasoned industry watchers. Samsung, we are afraid to say, has been remarkably slow in adapting to this new reality.

Reason 2:The arrogance of market leadership

Make that, the pitfalls of strong market leadership. When Nokia crashed spectacularly, Samsung was at hand to take the baton of market leadership in India. To their credit they built on it most impressively, avoiding the mistakes Nokia made and taking care to build market share without sacrificing the basic tenets of running a profitable business. Unlike some of the many upstarts who came and went subsequently, notably LeEco and some more.

But like any market leader, Samsung today has built its own ecosystem of vendors, trade, and other internal stakeholders, married to their legacy success, with perhaps too much at stake to just let it go or change it quickly. We wonder if like other ivory tower experts, Samsung management even gets to hear the signs of bad news before its too late. Be it the offline stores, launch strategy or even customer care, the company has clearly fallen into a rut. We feel the company is finding it increasingly difficult to carry its internal team on a common purpose, unlike the glory days of 2012-2015. that has given new, nimble forms like Xiaomi an opportunity to grab share, user loyalty and build their market models without a matching counter from Samsung.

Reason 3: The Chinese onslaught

Like the four horsemen of the apocalypse, four Chinese firms have really hurt Samsung where it hurts. While Oppo and Vivo assaulted Samsung on its mass segments and offline sales channels, One Plus shocked the leader into freeze mode with the success of its One Plus series in online sales. And finally, Xiaomi, with its aggressive pricing and decent quality and calibrated market strategy has made deep inroads, guaranteeing itself the number 2 spot in India. Samsung, based on trade feedback, has behaved more like a firm willing to watch these firms start behaving ‘normally’ rather than innovate on its own. Refusing to recognise the new normal for what it is. Thus, from a refusal to match them on margins, to threatening retailers with being cut off for selling other brands, the firm has exhibited all the signs of a market leader caught unawares. One Plus, while it started off with smaller numbers initially, has today moved offline too, and is selling volumes that are bound to have dented more than a few points of market share in the high end segment for Samsung.

Reason 4: The Apple Obsession

To many watchers, Samsung seems to have carried over its Apple obsession from richer markets to India too. That was a bad move. Not only was India, until 2016 end, a relatively small market for Apple, but by focusing inordinately on ‘countering’ Apple here, we believe Samsung missed the woods for the trees. Allowing the other brands at lower price points to grab market share. The worst part is, thanks to the Galaxy 7 fiasco, Samsung India again froze for some time, allowing even Apple to steal a march over the last few months, and especially now with its latest models. Thus, not only did Samsung seem to focus disproportionately on the high end segment and that too with an Apple focus, it seems to have lost its way in the middle and lower markets. With Nokia making a strong comeback bid under new ownership, this battle is suddenly a lot tougher and leaves Samsung with some very tough choices to make.

Reason 5: Lack of accountability

As readers might be aware, Samsung has been embroiled in criminal investigations, that have led to the arrest and sentencing of key executives back home in South Korea. While it would be farfetched to blame that on its performance, as demonstrated by its relatively sustained profits and more during the whole drama of the trial and arrests, there can be no doubt that with that kind of tumult at the top, the firm will place premium on stability elsewhere, giving more space for outposts in other countries to avoid the consequences of missteps. That might be one reason why the slipping numbers in India relative to Industry or key competitors have not drawn the usual response and pressure from the Korea headquarters.

The big question is, can the firm pull itself out of the rut in India. We believe it faces the fight of its life yet again in India, for this is a market that no longer accords quite the same respect to legacy brands, and nothing can be taken for granted. Samsung needs to respect the changing Indian consumer, who is not only younger but also much different from the consumer that were in market 5 years back. Where to discover this consumer, how to communicate, and finally, how and what to sell to this consumer, the rules have all changed, and the firm needs to move fast. We believe that with its years of experience and market leadership in India, it will not have to look too far to find the right strategy and methods. That is, if only it is willing to look.

For the latest tech news and reviews, follow us on Twitter, Facebook, and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel.



Please enter your comment!
Please enter your name here

Latest News