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Focus Analysis | Why is Samsung “the world’s number one” running in the Chinese market?

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Just a few months after Quan Guixian’s emotional announcement of Samsung’s “return to the Chinese market”, the company launched a massive layoff plan in China.It seems that the last fight is not very good.At the Wuzhen conference on February 28 this year, Quan Guixian, president of Samsung Electronics Greater China, said, “I have a lot of thoughts at the moment because I fully understand those friends who love Samsung, including Samsung’s fans, partners and consumers.Long-standing concerns. Here, I want to tell you that we are fully prepared to return to the battlefield with innovation and products.” The new product he said was the protagonist of the day’s conference, the Galaxy S10.Many people, including Quan Guixian, see it as the star of the Samsung mobile phone returning to the Chinese market.Unfortunately, many of these high-profile products were not sent to consumers, but were internally digested.On October 3, Samsung closed its last factory in China. Every employee who worked for 10 years in Huizhou Samsung Electronics received a Galaxy S10+ mobile phone from the company, as well as an EBO watch, a commemorative album, and “N”.+1″ compensation plan.After the employees of the Samsung Galaxy S10 assembly line left for a month, the employees in the office should also leave.On November 4th, 36 氪 received news that Samsung will lay off more than one-third of its employees in China. The 11 branches and offices in the country will eventually be merged into five, mainly related to the sales and marketing departments. The mobile phone business is the hardest hit.In the afternoon, Samsung officially responded that the layoffs were to promote the competitiveness-related business adjustments in China, so as to promote rapid growth in China’s 5G market.In fact, the authenticity of layoffs is tacit.Similar to the compensation plan of Huizhou factory, the retirees can choose a Samsung A series or S series mobile phone according to the working age, and get N+1 compensation and year-end award.More than 2,000 employees are expected to be laid off.In 2013, Samsung smartphones were still the first in China, with a market share of 20%.Six years later, it shipped only 700,000 units in China in the second quarter, accounting for 0.7% of the market.Galaxy S10 This flame did not ignite in China.Samsung has two completely different situations in China and overseas markets.Market research firm Canalys data shows that in the third quarter of 2019, Samsung’s shipments reached 78.9 million units, an increase of 11% year-on-year, retaining the number one position in the world, and Huawei ranked second with 66.8 million units.Driven by the two brands of Samsung and Huawei, global smartphone shipments increased by 1% year-on-year, achieving the first increase in the past two years.The Galaxy S10, which failed to save the Chinese market, sold well overseas.According to the latest statistical report from the research firm Counterpoint Research, the cumulative shipments of the three devices of the Samsung Galaxy S10 series have exceeded 16 million from March to May this year.This figure is 12% higher than the Galaxy S9 sales in the same period in 2018.How can Samsung mobile phones lose the Chinese market?The times have changed, and Samsung has always been the Samsung Galaxy S10, which carries the mission of reviving the Chinese market.At the heart of the controversy is that even the cheapest version of the Galaxy S10e starts at $5,300, and Chinese consumers are not willing to pay.In fact, Samsung sold more expensive mobile phones in China six years ago, and at that time, the per capita disposable income was less, and the smartphone market was even more unsatisfactory.According to IDC data, Samsung ranked first in the Chinese mobile phone market in the fourth quarter of 2013 with a market share of 19%. The second is Lenovo with a market share of 13%, the third is 11% Cool, and the fourth is 10%.Huawei, Apple’s share of only 7%, ranked fifth.In the Android market at the time, Samsung, which can produce its own AMOLED screens, has unparalleled hardware advantages from other manufacturers.In 2013, Samsung released the Galaxy Note 3 with a 5-inch Super AMOLED screen, a Galaxy S4 larger than the latest iPhone screen, and a 5.7-inch Super AMOLED screen for 4K video.In October of the same year, Samsung released the world’s first Galaxy Round with a flexible display.This product features a curved design on the left and right sides of the fuselage, and even with a screen size of 5.7 inches, it can be gripped with one hand.Moreover, the flexible screen weighs only 5.2g, has a thickness of only 0.12mm, and has a radius of curvature of 400mm.Samsung Galaxy S4Galaxy S4 is pre-sale price of 5199 yuan on the day of the listing, more than 4488 yuan iPhone 5C, almost 5288 yuan from the iPhone 5S.The Galaxy Note 3 starts at $5,399, more than Apple.Looking at the other brands of mobile phones circulating in the market at the time, we know that Samsung has such a high capital.Together with the Nokia Lumia 1020 released during the period, the price is 5,999 yuan in China. Many people who have just switched from a functional machine to a smart machine want to buy a top-grade product and there is not much choice.But change is already brewing.In 2013, the per capita disposable income of Chinese residents was only 18,311 yuan. You can’t expect most people to buy more than 5,000 mobile phones.According to Strategy Analytics data, the growth of the smartphone market this year is largely driven by cheap Android devices in emerging markets such as China and India, which typically cost less than $150.150 dollars, which is the thousand yuan machine market.This market is still being smashed by the cottage, but it was quickly eaten by Xiaomi.Just a few months later, Samsung handed over the top spot in the Chinese market.In the second quarter of 2014, Xiaomi’s smartphone shipments in China reached 15 million units, compared with 4.4 million units in the same period last year.In the same period, Samsung sold 13.2 million smartphones in China, compared with 15.5 million in the same period last year.In the second half of 2017, Xiaomi also defeated Samsung in the Indian market for the first time, taking the position of the latter’s market share for many years.Samsung is not ignorant.In September 2014, Samsung launched the Galaxy Alpha, a cheap product line, for $3,999 – the same year’s Xiaomi 4 was priced at $1,999.And the latter is bigger than the former, higher memory, and higher camera pixels.For a consumer who just buys a mobile phone to use WeChat and play games, Samsung really has no reason to win.Xiaomi founder Lei Jun at the Xiaomi 4 conference.At the press conference of JASON LEE/REUTERS Xiaomi 4, the organizer sent a light stick to each of the guests, and the shouts of the “Dry Gree” of the rice noodles were one after another.Lei Jun said with excitement that after defeating Dong Mingzhu, the 1 billion yuan won will be sent to those who bought Xiaomi.Time is so ruthless.Lei Jun did not win Dong Mingzhu, and Xiaomi gave the top spot under him to Huawei.Samsung has ushered in more aggressive competitors in the high-end mobile phone market.According to the report of the research institute DFK, from the first quarter of 2016 to the fourth quarter of 2018, in the mobile phone market of more than 4,000 yuan in China, Samsung’s share dropped from 14% to 3%, and Apple dropped from 84% to 68%. Huawei (notWith glory) increased from 2% to 20%.After the Samsung Galaxy S10e came out this year, it was inevitable that it was compared with Huawei Mate 20 by the consumers: the configuration difference is not big. The biggest difference is that Samsung has a unique super AMOLED screen, and one is a TFT-LCD screen, but Huawei sells 3999.Samsung sold 5,300.Like Samsung, Xiaomi 9 with the Snapdragon 855 chip sold for 2,999 yuan.Samsung’s pursuit of the profit margin of the mobile phone business has led to frequent mistakes in its pricing in the Chinese market.The problem of quality control that has not been resolved and the battery that has been exploding and igniting has accelerated the decline of Samsung’s reputation in China.In the past 6 years, the Chinese mobile phone market and Chinese mobile phone users have undergone tremendous changes, and Samsung still looks like that Samsung.The chip business was hit, and the subsidies were less than the capital. In 2019, all the mobile phone brands in China were not good.36 氪 In the article “2019, China Mobile Phone Frightened 150 Days | Squat”, it describes a catastrophe experienced by China’s mobile phone market in the past half year: Huawei was listed by the United States as a trade control entity, and it was blocked by the sea and turned to the domestic market..The living space of domestic brands such as millet, OPPO and vivo has been greatly squeezed.By the second quarter of this year, Huawei’s China market share has reached 38%, and Nokia has kept pace with the peak period.Under the fierce fire of Huawei, Xiaomi, OPPO, and vivo opened up the sea tactics, seized the sales channels, and cut the price of the products in line to obtain a breathing space.Samsung is no exception.A new mobile phone was released at the end of February, and “trade-in” was started at the end of May.According to Samsung’s announcement, from May 24th to June 30th, consumers can recycle old mobile phones in the designated offline stores to purchase Samsung Galaxy S10 series mobile phones. In addition to the model deduction price, they can enjoy 1,000 yuan.Subsidies and Huali 24 interest-free installment discounts.If you buy on Samsung’s official website, the order will be reduced by 300 yuan.For example: If you have a Samsung Galaxy S8 with a recycling price of 1,279 yuan, you can call it a recycling coupon, you can get a 188 yuan coupon, plus a purchase subsidy of 1,000 yuan, the official website will be reduced by 300 yuan, thenYou can buy the Samsung Galaxy S10e for $4,999 for only $2,232.If you make 24 free interest-free purchases on this basis, you can pay only about 93 yuan per month.The scale of subsidies is unprecedented.However, in the second quarter, Samsung only sold 700,000 mobile phones in China, while Huawei had 36.3 million.The subsidy didn’t make much difference, and it really didn’t work.Samsung’s third-quarter earnings report showed that the global semiconductor industry cycle led to a decline in chip prices, dragging Samsung’s third-quarter operating profit down 56% year-on-year, falling for the fourth consecutive quarter, and may have a five-day losing streak this quarter.The chip division that contributed more than 75% of profits to Samsung last year was greatly affected.The division’s operating profit for the third quarter was 3.05 trillion won (approximately US$2.619 billion), a significant drop of 77.7% from 13.65 trillion won in the same period last year.If the cyclical loss of chip price decline can gradually rise back, Samsung’s layoffs in the United States make people worry about whether it is “road anxiety.”This week, Samsung Electronics announced that it has shut down its CPU research department in the United States, and the Exynos chip based on the ARM core has not been advanced.Samsung is one of the few mobile phone manufacturers with self-developed chips, which was once a selling point for Samsung mobile phones.But with the dismissal of 290 R&D staff, the future has become blurred.In general, Samsung does not have the strength and there is no need to subsidize the Chinese mobile phone market.The reduction in costs is reflected in all aspects: not only cut sales and marketing personnel, but also shut down factories, and next year, more than 60 million Galaxy M and Galaxy A-series smartphones will be outsourced to China ODM, which will account forThe company’s annual shipment of 300 million smartphones is 20%.Today, Samsung still holds the top spot in overseas markets, but Xiaomi, OPPO, and vivo, which have been forced by Huawei to adopt a more aggressive strategy, have already looked to the other side of the ocean.Redmi has begun to attack the European carrier market; the OPPO organizational structure has been adjusted to unify the Chinese and overseas regions into global markets; Reno2 has also been selected in India rather than domestically.That would be a more cruel battlefield..