Samsung bets on 5G to recapture China market
Samsung Electronics is seeking to capitalize on China’s introduction of fifth-generation (5G) networks to boost its smartphone market share there, which has fallen to below 1 percent, company officials said Sunday.
The tech giant opened a flagship store in Shanghai’s famous pedestrian shopping street, East Nanjing Road, Oct. 18, which houses the firm’s latest smartphones, tablet PCs and smart watches. The 800-square meter store is the largest Samsung store in China.
The opening came days before China launched commercial 5G services in major cities such as Beijing, Shanghai and Guangzhou, Friday, with the country planning to expand the network to more than 50 cities by the end of the year.
Operating the largest store on one of the busiest streets in China is part of Samsung’s aggressive marketing strategy, as the 5G market there is expected to grow rapidly.
“The number of customers who subscribe to the wireless services of China’s three telecom companies has reached 1.2 billion, 24 times more than Korean subscribers,” Yuanta Securities Korea analyst Choi Nam-gon said. “But the companies suffered a decrease in their average annual growth rates amid intensifying competition and government regulations between 2014 and 2018. This means that they now face a growing need to offer 5G services.”
The circumstances will also be a fitting opportunity for Samsung to restore its falling market share in the Chinese smartphone market as the company is one of the few manufacturers in the world that sell products that can operate on 5G networks.
Its smartphone business in China had flourished until around 2013 with about a 20 percent market share. But the share has dropped sharply recently due to the rise of Chinese manufacturers Huawei and Xiaomi.
According to market tracker Strategy
Analytics, Samsung had only 0.7 percent share of China’s smartphone market in the second quarter of the year.
From Samsung’s point of view, China’s introduction of 5G services is a decisive chance to dominate the 5G market there and raise its share to double figures because Apple’s new iPhone 11 lineup are all fourth-generation, or LTE (longterm evolution), models that cannot use 5G.
“The opening of our largest flagship store reflects our determination to enhance our presence in China’s 5G market,” a Samsung Electronics official said. “We also plan to increase the number of stores in other cities.”