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Home / Opinion / Views /  What could the leadership rejig mean for Samsung in India?

On New Year's Eve, South Korea's Samsung announced a major reorganization of its Indian leadership. The rejig follows an organizational overhaul at its Korean parent, and comes in the larger context of the rising competition that Samsung faces in India and worldwide.

In India, competition from Chinese players has intensified in the smartphone segment. Smartphone shipments into the country have maintained a strong momentum, and the Chinese are fast cornering market share in the non-premium smartphones category. Demand has picked up significantly on the online sales channels, especially after the outbreak of covid-19.

According to latest research by Counterpoint’s Market Monitor, Chinese brands together managed to garner 74% share of the Indian smartphone market in the third quarter of 2021. Xiaomi maintained its leadership position with 22% share, while Samsung was at the second spot with a 19% share. Vivo (15%), Realme (14%) and Oppo (10%) – all Chinese – are turning out to be aggressive competitors. The figures suggest that Samsung will have to sweat it out to secure and expand its standing in the smartphone segment. Others like Transsion group and OnePlus are growing too, and cannot be taken lightly. Market Monitor research shows that both companies reported robust growth in the third quarter — of 72% and 55% -- respectively.

For Chinese brands which do not have great store presence, the pandemic seems to have come as a blessing, with online channels capturing an estimated 55% of the total smartphone shipments to India during Q3. Smartphone shipments in Q3 had crossed the 52-million mark.

Adding to Samsung's headaches is Apple, that is seeking to beef up its presence in India in the high-end segment of the smartphone market. Apple grew over 200% year-on-year in Q3, taking the lead position in the premium (above Rs.30,000 price point) and ultra-premium (over Rs.45,000) segments with a share of 44% and 74%, respectively.

Despite political calls to boycott Chinese imports following a border conflict and continued tensions, Chinese brands are snapping at the South Korean Samsung's heels. It is not surprising then that Samsung is keen to push its Indian leadership to not only reverse market share losses, but race ahead of competition. The new chip-making facility it is setting up in Texas and the investments it is pumping into chips and biotech, are all part of the global drive to regain lost markets.

Samsung's troubles started when its de facto leader Lee Jae-yong, also known as Jay Y. Lee, was jailed in a bribery case. He was released recently on parole after serving more than half of the two-and-a-half-year sentence. Soon, Samsung kicked off a corporate restructuring. The electronics giant's mobile and consumer electronics businesses are being merged into a single entity. Besides this, there will be a component division. From three verticals earlier, it has reduced its business divisions into two. The India rejig has come against this backdrop of increased synergies, and Lee's move to take complete control over decision-making.

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