Why Is Samsung Bullish About India-First Online-Only Smartphones?

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India is the fastest growing smartphone market in the world. The low penetration of smartphones (33%) and the string Q-o-Q growth make it an attractive destination for all the major smartphone manufacturers of the world. The Korean smartphone major, Samsung dominated the Indian smartphone market for quite a long time. However, it is now only second best to the all-conquering Xiaomi. But the company is definitely looking to make a comeback this time around. Samsung is reportedly gearing up to do so with its new India-first smartphones. Let us look at this news in a little more detail.

The need for Samsung to rise

Samsung has seen its dominance in the Indian market slip to its Chinese rivals. Hence, the people at Samsung can’t wait to get back to where they think they belong. Moreover, they plan to do so through using the exact methods that their rivals used to pip them – targeting online sales.

Now the question arises: is this a valid alternative? Turns out, it might just be the best!

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The impact of online sales on the smartphone industry

In a country like India, the online marketplace plays a huge role in the making or breaking of a company’s success. This is especially true in an industry like that of smartphones. The increase in the share of online sales in the overall smartphone sales in the country has been quite remarkable. From accounting 25% of smartphone sales in Q1 2017, they have gone up to 40% in Q4 2018. This dominance shows among the companies who succeed in their online sales department.

The biggest example of this is right in front of our eyes: Xiaomi.

Xiaomi and its dependence on online sales

Xiaomi has been dominating the Indian smartphone market for some time now. Samsung was, in fact, found lagging behind the Chinese giant in sales in at least two out of the three fiscal quarters in 2018 for which data is available. What’s interesting to note is the reliance of Xiaomi on the online market. In Q2 2018, 64% of its sales occurred through the online medium. In comparison, Samsung had only 15% sales through the same medium. This explains why Samsung is targeting the online market as much as it is through its India first smartphones.

Samsung’s gameplan

Samsung is planning to release its three new M-series phones only through their website and Amazon.com’s Indian operation. Equipped with better batteries and features like fast charging, the new M-series phones have all the attributes which usually are a hit online. Hence, Samsung may just substantially increase their online presence with the focused online sales strategy.

What’s interesting to note is that in spite of the lack of online sales, it did manage to go pretty close to Xiaomi in terms of overall smartphone sales in that fiscal year. This represents the strong offline presence that the South Korean giant possesses in India. If the company somehow manages to get their online sales anywhere in the same league as that of Xiaomi, their offline strength might just help them overcome the Chinese giants.

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However, it depends on the success of India-first smartphones. Will Samsung be able to make a comeback? We’ll have to wait and watch.

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