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Samsung focuses on mid-tier segment to take on Xiaomi in smartphone biz

Arnab Dutta/New Delhi 14 May 19 | 10:24 PM

Samsung India, the country’s largest handset manufacturer by revenue, is going full throttle to overtake market leader (by volume) Xiaomi in the smartphones segment, and has charted a new growth strategy for the purpose. 

The plan, encompassing online presence, product features and positioning, has been chalked out in line with the overarching guidelines from its global management.

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The move comes a year after trailing its Chinese rival Xiaomi that clinched the top spot in the smartphone market from the Korean chaebol in the late 2017s. 

Xiaomi, unlike Samsung, identified product segments and targeted consumers in those areas. The firm, now with over 30 per cent share in its kitty, focuses heavily on entry (price range between Rs 5,000 and Rs 10,000) and mid segments (Rs 10,000 to Rs 25,000) of the market that are growing at double digits. 

And unlike Samsung, it offers only a handful of devices (usually one to three) at a time to consumers.

The new strategy by Samsung, adopted two months ago, aims to revamp presence in e-commerce channels that generate over 35 per cent of sales in the industry. To boost sales in the channel, where Samsung trailed Xiaomi for years now, the Korean major has introduced an all new online-only M series of smartphones. As a result, analyst firm IDC noted, Samsung’s share improved to 13.5 per cent in the January-March quarter. However, Xiaomi continued to lead with 48.6 per cent share.

To counter Xiaomi’s ever-growing clout in the entry and mid-segment, Samsung has placed its Galaxy A series at the forefront. The revamped A series, unlike its previous avatar, now covers a wide price range – from below Rs 6,000 to Rs 28,000. What has also changed is Samsung’s approach towards the price segment. In line with the vision of DJ Koh, its global president for information technology and mobile communications division, the local unit is now focusing on bringing in innovations in the mid-segment – unlike its earlier approach of introducing them at the top of the pyramid. 

“Innovations are now introduced even in mid-tier phones. Koh has been very passionate about this," said Ranjivjit Singh, chief marketing officer, Samsung India.

A blueprint of the plan was drawn after a rigorous study of needs of the millennial consumers in the country, who now hold close to 80 per cent of all smartphones and are the single-most important group. A large group of staff members of Samsung India, including its sales and marketing, research and development and product development teams, identified and implemented needs of the millennials. “Today, it is very important to listen to the consumers’ needs and react to it quickly," said Singh.

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