Samsung draws battle lines to counter Xiaomi

Samsung is lining up new products, increasing focus on e-commerce channels and tightening its grip over retail outlets.

Samsung, the South Korean consumer electronics giant that till recently dominated India’s mobile handset space, is trying to regain the ground it has lost in the past few quarters.

To counter the heightened competition from Chinese rivals like Xiaomi, which dislodged it from the top spot nearly after five years in mid-2017, Samsung is lining up new products, increasing focus on e-commerce channels and tightening its grip over retail outlets.

Samsung is coming up with four new models to counter the flurry of successful launches in the affordable segment (Rs 10,000-20,000).

The devices, priced at Rs 13,990 and above, offer attractive cash back schemes.

In fact, its biggest challenge is with its affordable range of smartphones, where the three Chinese ninjas - Xiaomi, Oppo and Vivo - have bagged a large slice of the market.

According to Tarun Pathak, associate director, Counterpoint Research, the firm needed to refresh its portfolio.

“Samsung is on the back foot with heightened competition. Their biggest challenge is their speed of time-to-market.

"Samsung has been slow when it comes to reacting to the competition, while most others were coming up with new products in three months.

"Their objective should be coming up with India specific models and a faster time-to-market,” he said.

According to Mohandeep Singh, senior vice-president, Samsung India, the new products would be crucial for the firm.

“With these launches we aim to consolidate our market share by five per cent this year.”

Singh said premium features like infinity display was being launched for the first time in the affordable segment. He said competition might remain tough.

While Samsung - the largest full-range player in the country with products ranging from Rs 2,000 to Rs 65,000 - has been vocal about the importance of a wide portfolio.

The firm is now looking for areas of success by launching a few key models in specific price segments.

The strategy, popularised by rival Xiaomi, that relied on a handful of models and eventually reached sales of millions of devices a month, is now being replicated by Samsung.

According to Singh, how many new models one launches is not as important.

Rather, a few successful models can play a bigger role in one’s success.

Xiaomi, which has been the strongest player on the online channel since 2015, now holds 57 per cent of the online mobile sales market.

Samsung lags Motorola (second) and Huawei (third).

To add spice to its online strategy, Samsung has tied up with Paytm, which will offer special discounts to online buyers.

While the entry of Vivo and Oppo and their spending spree led to a fierce fight over shelf space on retail shops, sources said, Samsung’s distribution has got a leg up in the recent months.

Frequency of market visit and detailed monitoring of the inventory at retail level has got more focus as Xiaomi rattled the offline marketplace with its preferred partner initiative.

The size of Samsung’s field forces has gone up by 10 per cent, according to sources.

The top deck has seen changes, too. At least four top-level movements have happened during 2017 and 2018 in and around its mobile business.

Manu Sharma (earlier vice-president of mobile category), Asim Warsi (senior vice-president) and Aditya Babbar (category head), Dipesh Shah (managing director of Samsung Research and Development Institute) found new roles during the time.

Photograph: Noor Khamis/Reuters