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Samsung's mobile biz to benefit from anti-China sentiment in India: analysts

All News 09:00 July 11, 2020

By Joo Kyung-don

SEOUL, July 11 (Yonhap) -- Samsung Electronics Co. is expected to increase its presence in the Indian smartphone market on growing anti-China sentiment in the South Asian nation, analysts here said Saturday.

Sinophobia is growing in India with a public boycott of Chinese-made goods following the deaths of 20 Indian soldiers in last month's border clash between the two nuclear-armed neighbors.

Analysts said Samsung, South Korea's top electronics firm, is likely to benefit from anti-China sentiment in India, especially in the smartphone market where Chinese players have dominated.

"Shipments of consumer goods that are against public sentiment will face difficulties," said Lee Chang-min, an analyst at KB Securities. "As Chinese smartphone makers are expected to suffer sales decline in India, Samsung is expected to take advantage of it."

This photo, provided by Samsung Electronics Co. on March 6, 2020, shows Indian consumers inspecting the company's Galaxy S20 smartphones at an event in Gurugram, India. (PHOTO NOT FOR SALE) (Yonhap)

According to market tracker Counterpoint Research, four of the top five smartphone brands in the Indian smartphone market were from China in the first quarter of the year, with Samsung being the only non-Chinese company.

Xiaomi led the way with 30 percent, followed by its Chinese compatriot Vivo with 17 percent. Realme and Oppo were ranked fourth and fifth in the Indian smartphone market with a share of 14 percent and 12 percent, respectively.

Samsung came in third on the list with a 16 percent market share, Counterpoint Research data showed.

Analysts said the upbeat performance in India could push up Samsung's overall mobile business.

India is the world's second-largest smartphone market after China. Samsung also runs the world's largest mobile manufacturing factory in Noida, northern India.

"For Samsung, India is a market that the company cannot give up," said Roh Kyoung-tak, an analyst at Eugene Investment & Securities. "Samsung's long-term business strategy must have a plan for the Indian market."

Samsung's mobile business has been losing its steam in India in recent years, as Chinese makers expanded their sales with price-competitive phones.

Samsung's market share gap with Xiaomi was only 3 percentage points in the second quarter of 2019, Counterpoint Research data showed, but the difference grew to 14 percentage points as of this first quarter.

In this photo, provided by Samsung Electronics Co.'s Indian unit on Feb. 20, 2020, Indian consumers inspect the company's foldable smartphone, the Galaxy Z Flip, at an event in Gurugram, India. (PHOTO NOT FOR SALE) (Yonhap)

To create sales momentum amid anti-China sentiment, Samsung recently introduced two new smartphone marketing plans in India.

The Galaxy Assured scheme offers users a buyback option that gives maximum 70 percent of the value of premium smartphones. The Galaxy Forever program allows consumers to purchase Samsung's flagship Galaxy S20 smartphone at just 60 percent of its original price.

Samsung, the world's largest smartphone vendor, is hoping for a fast recovery of the global mobile market that has been struggling with the novel coronavirus pandemic.

Analysts said the second-quarter performance of Samsung's mobile business unit may not be worse than expected due to the economic reopening of major markets from end-May, though an earnings decline appears inevitable.

Samsung will release the Galaxy Note 20 phablet and the Galaxy Fold 2 foldable smartphone next month to drive its handset sales in the second half of the year.

kdon@yna.co.kr
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