Is Samsung Being Overly Ambitious With New Smartphone Offerings In India?

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Samsung Electronics Co Ltd (KRX:005930) is growing faster than ever in the world’s second-largest smartphone market India. The company said that it is estimating a 5% rise in overall smartphone market share in India with the launch of its latest devices.

The South Korean giant registered an impressive 27% growth in mobile revenue in India for the fiscal ending 2017, clocking a mammoth INR 34,300 crore in mobile sales revenue. This has clearly helped Samsung to retain its numero-uno position in India.

Today Samsung India launched four new smartphones of its Galaxy range – Galaxy J6, J8, A6 and A6+ – priced between Rs 13,990 and Rs 25,990. All devices will be available from tomorrow except for J8 which will available from June 20 onwards.

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With the launch of new models, Samsung firmly believes that it will continue to drive strong growth and exceed the current revenue and sales figures even more.

Samsung’s impressive growth reflects its growing dominance across all segments – affordable, mid-range, and premium. The astounding success of its J series is highly responsible for these figures.

“Every third smartphone sold in India is a Galaxy J series smartphone,” the company had said.

Recently, Chinese phone makers like Xiaomi, Oppo and Vivo have been making waves in India’s price sensitive and highly competitive market. Both in terms of value and volume, smartphones within the price range of Rs 10,000 to Rs 20,000 are preferred a lot in India, making it as the fastest growing segment. The segment grew by 34% last year and within that Samsung’s share grew by 42%, according to German market research firm Gfk.

The Chinese makers offer incredible features and specs at exceptionally low prices but apparently failed to undercut Samsung’s market. While Samsung’s officially claimed that the company is leading the smartphone industry in India with 40% market share by value and 37% market share by volume in Q1 2018, albeit the claim is in direct contrast to figures released other research firms. Samsung always had the added advantage from the enormously wide range of the Galaxy series in every segment.

The domestic smartphone industry was pegged at Rs 80,000 Cr in 2017, as per Gfk.

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With these phones that we are launching, we will further consolidate our share in this most important and fastest growing segment. These phones will give us competitive share against competition in the market,” said Mohandeep Singh, Samsung India SVP.

Samsung has been lagging behind Xiaomi in India for the last two consecutive quarters. In Q1 2018, Xiaomi captured a record 31% share of Indian smartphone market. On the other hand, Samsung could only grab a 26.2% share during the same period.

In the premium segment, however, Samsung regained its top spot in Q1 2018, capturing almost half of the segment. Thanks to Galaxy S9 and S9 Plus, who grabbed a 12% and 17% share in the premium segment, respectively.

Although the Chinese players in mid-segment and OnePlus in premium segment have been successful in luring the Indian buyers, Samsung’s strong growth in the overall smartphone market is gradually eclipsing the sales of its close rivals. The Korean phone maker has also been taking shots at Apple’s iPhone X to promote its Note 8 and Galaxy S9 in its ads.

Samsung is living up to its legacy and has continued to make strides in the domestic market. In FY2016, the net profit of Samsung India Electronics jumped 115% at Rs 3010 Crore. The revenue grew 19.2% to reach Rs 47,001 Crore. Even the Note 7 fiasco didn’t have much effect on the figures.

The rapidly evolving smartphone industry of India has experienced a major shift since a couple of years after the advent of high-specced and competitively priced handsets. Affordable phones and cheaper data costs have pushed smartphones beyond urban masses. The India smartphone market recorded a healthy 14% annual growth, with 124 million units of smartphone shipped in 2017, according to IDC.

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