Many people in the past may have forgotten, but we can't ignore the strong momentum of Samsung phones. Since 2011, when Samsung first topped the global smartphone market, they have been the global sales champion, holding the top spot for 12 consecutive years. Even in the first three quarters of the year, Samsung was still number one in the world, and it is almost certain that it will continue to be so this year. So, how did Samsung do this, and what does this teach us?
Before answering this question, we first need to understand Samsung's share of the Chinese market. Ten years ago, Samsung mobile phones dominated the Chinese market, with a market share of 219%, ranking first. However, with the rise of Chinese brands such as Xiaomi, Lenovo, Huawei, and Coolpad, Samsung's market share has gradually been encroached upon. By 2015, Samsung had fallen out of the top five in the Chinese market. What is even more difficult for Chinese consumers to accept is that two things happened in 2016 that caused Samsung to be boycotted by Chinese consumers. The first thing is Samsung's "double standard" in dealing with Chinese consumers when dealing with the Galaxy Note7** incident. In August of that year, Samsung released the Galaxy Note7, and the ** incident followed. In response to such a situation, Samsung has taken measures to recall it globally, but it has not included the Chinese market. Even in the case of a Galaxy Note7** incident in China, Samsung issued a statement saying that it was caused by the use of induction cookers by consumers. This caused dissatisfaction among Chinese consumers, which eventually led to Samsung being boycotted by Chinese consumers.
Another incident was at the Shijiazhuang Order Fair in October 2016, when Samsung's Korean executives asked the Chinese management to kneel down en masse to motivate dealers to place more orders. According to reports, three Chinese employees were reluctant to kneel, and as a result, they were pressed to kneel by South Korean personnel. Later, Samsung explained that kneeling is a way to perform a big bow in Korean culture, but the Chinese objected to it. No matter how they are interpreted, these two events have left a very bad impression on Chinese consumers and led to Samsung's reputation in the Chinese market.
For these reasons, Samsung's market share in the Chinese market plummeted, eventually closing its last mobile phone foundry in 2019. Nowadays, Samsung phones sold in China rarely attract people's attention. This also leaves the impression that Samsung is almost never thought of when it comes to smartphones. But in fact, on a global scale, Samsung phones are able to compete with iPhones and lead overwhelmingly. Taking the third quarter of this year as an example, according to data from TechInsights, an authoritative market research organization, Samsung's mobile phone shipments reached 59.5 million units, accounting for 20% of the global share1%。Apple's share is 157%, and the share of other manufacturers is not as good as Samsung.
So, how did Samsung phones stay number one in the world with the loss of the Chinese market?This is mainly due to Samsung's diversification strategy.
First of all, Samsung phones have a wide market penetration around the world. They have a strong sales network and ** chain in various regions of the world. Especially in developing countries, Samsung's market share tends to be higher. Due to the fierce competition in the Chinese market, Samsung will focus more on the development of other emerging markets, such as India, Indonesia, Brazil, etc. In this way, even as the Chinese market retreats, Samsung will be able to maintain its global leadership through growth in other markets.
Secondly, Samsung phones have a strong product line and brand strength. They have a rich product line in flagship, mid-range, and low-end models, which are able to meet the needs of different consumers. Moreover, Samsung's brand strength is recognized worldwide. The quality of their products is stable and the user experience is good, which has earned them loyal fans and word of mouth. Although Samsung may not be as influential in some markets and among certain age groups of consumers as before, there are still many people who choose to buy Samsung phones globally.
Finally, Samsung's diversification strategy doesn't just stop at the mobile phone market. They also have a wide range of businesses in other fields, such as electronics, semiconductors, displays, etc. The existence of these businesses provides technical and resource support for Samsung mobile phones. Moreover, they have also partnered with carriers, retailers, and more to expand their sales channels. This has enabled Samsung to maintain strong sales and earnings globally.
To sum up, despite losing the Chinese market, Samsung mobile phones have been able to maintain their position as the number one in the world with their diversification strategy, global market penetration, and strong product line and brand strength. For us, this reminds us to keep a strategic eye in the face of difficulties and challenges, to look for new opportunities, and to emphasize product quality and user experience. The most important thing is that we need to think from multiple perspectives, expand our business scope, and find new growth points. In this way, even if you lose a market in some places, you will be able to maintain a competitive advantage in others.