India is the battleground country for Samsung and Apple

Industry

Published: 27 Sep. 2020, 18:00

India is the battleground country for Samsung and Apple

Customers in India look at Samsung's new Galaxy Z Flip at an exhibition hall in Gurugram, India. [SAMSUNG ELECTRONICS]

Samsung Electronics and Apple are doing everything they can to capture India, with 1.4 billion potential customers and the world’s second-largest market.

They are competitively opening stores, upping the marketing and introducing affordable smartphone models in a race to be the pioneers in the country.

India is considered a land of opportunity as almost half of the population has never owned a smartphone before. The stars seem to be aligning, and world politics is in their favor, as a growing number of Indian consumers are seeking alternatives to Chinese smartphones amid budding anti-Chinese sentiment.

Apple opened its first online store in India Sept. 23, the first direct sales channel for the U.S. smartphone company in the country. Previously Indian consumers could only purchase Apple devices through Bengaluru, India-based e-commerce site Flipkart or via Amazon.

The company plans to open an offline store in Mumbai, India, next year. Apple CEO Tim Cook tweeted the U.S. smartphone maker will “connect and expand support in India.”

A tweet of Apple CEO Tim Cook, introducing the company's first online store in India. [SCREEN CAPTURE]

Samsung, which opened its first physical store in India in September 2018, recently rehired Sumit Walia from India’s smartphone maker Oppo as the head of marketing for the India division. He is now Samsung India's marketing head, mobile division.

Sumit built his career at various smartphone manufacturing companies, such as Huawei and LG Electronics, and worked for nine years at Samsung India before heading to the homegrown company. He was largely responsible for Oppo’s remarkable success in the past year. Oppo was the fifth-largest smartphone brand in India in the first quarter of this year and outperformed Realme in the next quarter to reach fourth place.

“Sumit Walia’s appointment is crucial for the company’s efforts to increase its market share in India. The company expects more people who are currently working for Oppo and previously worked for Samsung to follow Sumit Walia in rejoining Samsung’s side,” reported SamMobile, an IT industry publication.

Indian consumers are very sensitive to price. For a long time, the most popular products were Xiaomi devices priced around 200,000 won ($170). Samsung smartphones were oftentimes considered the product for the rich and have been neglected by local consumers.

Smartphone sales in India for the second quarter dropped 51 percent on year and reached 18.4 million devices due to the economic impact of the coronavirus pandemic, according to CounterPoint research.

Sales of Samsung smartphones are growing. Xiaomi has 29 percent of the domestic market, and Samsung is at 26 percent. Vivo came in third place with 17 percent. In the first quarter, Samsung's market share was 16 percent.

Anti-Chinese sentiment coupled with an informal boycott of Chinese products in India may have helped push sales.

India has been in conflict with China for control of parts of Kashmir. Samsung and Apple have been trying to use this sentiment and increase marketing in an effort to enlarge its share of the pie in the Indian market.

“India’s smartphone market is projected to gradually increase in the third quarter, and we expect manufacturers will aggressively try to target the market,” said researcher Park Jin-seok of CounterPoint Research. “Samsung will likely rack up the most benefits as sentiment against Chinese brands grows in India.”

Customers in India test Samsung's new Galaxy Note 20 at the company's offline store in Bengaluru, India. [SAMSUNG ELECTRONICS]

Smartphone makers are also coming up with affordable options to meet Indian consumer preferences for cheaper products.

“It’s more important to increase market share with cheaper products than trying to attain bigger marginal profits by selling expensive products,” said one industry source. “This is because India is the world’s second-largest market and has great growth potential.”

Samsung will introduce the Galaxy F, an affordable line of smartphones priced between 200,000 won to 300,000 won, in India. LG Electronics has its “India Specific and India First” initiative and has hit the markets with the affordable Model W series.

Apple, known for its high-priced products, is pushing its budget offerings. It started selling the second-generation iPhone SE and the affordable Apple Watch SE recently.

BY JANG JOO-YOUNG [kang.jaeeun@joongang.co.kr]