Samsung's dominance in India’s smartphone market is waning, with its market share hitting the lowest point in a decade. Chinese competitors, Xiaomi and Vivo, have capitalized on the South Korean giant’s weakened relations with offline retailers, reduced presence in the budget segment, and increasing competition in the premium category.
In the June quarter, Samsung — once India’s smartphone market leader — reported a significant drop in both volume and value market share. According to market research firms IDC, Counterpoint, and Canalys, the brand fell to the third spot in terms of volume in the April-June 2024 period, with shipments dropping by 15.4%, marking its third consecutive quarterly decline. Samsung's volume market share fell to 12.9%, while its value market share dipped to 16% from 23% in the previous quarter.
Traditionally, Samsung held an edge over its Chinese competitors with pricier smartphones, while Xiaomi and Vivo dominated the low-cost segment. However, this landscape is changing. Vivo has been gaining significant ground in the premium category, driven by its V and X series, including its first foldable phone. Meanwhile, Xiaomi has ventured into the high-end market with phones developed in collaboration with German camera maker Leica.
Vivo’s offline presence has also expanded, further helping it strengthen its hold. Experts predict that Vivo will continue dominating the offline channel and remain among the top two brands in the market.
Market experts attribute Samsung's decline to a combination of factors, including brand fatigue, inventory management issues, and growing competition from Chinese brands. Navkendar Singh, Associate Vice President of IDC, noted that the higher pricing of Samsung’s newer models in the low- and mid-range segments compared to previous generations has contributed to the decline. Additionally, clearing older inventory took longer than expected, further impacting the brand’s performance.
Another significant factor is Samsung’s reduced presence in the sub-Rs 10,000 category, where it holds only 6% of its portfolio, compared to Xiaomi’s 18%. Tarun Pathak, Research Director at Counterpoint, pointed out that this gap has significantly affected Samsung's volume market share.
Samsung’s differential pricing for online and offline segments has long been a point of contention for offline retailers. The All-India Mobile Retailer Association (AIMRA) has repeatedly raised concerns over lower margins and pricing discrepancies. “Samsung’s disregard for mainline market retailers has dropped their market share below 14%. If they persist with similar strategies, they may fall below 10%,” said AIMRA founder Kailash Lakhyani.
The association has called for Samsung to increase margins, maintain consistent pricing across channels, and offer better support to retailers. However, many of these concerns remain unaddressed.
Adding to Samsung’s woes, the company has seen a high turnover in its sales and marketing teams, with around 30 senior executives leaving since the start of 2024, many of whom have joined rival companies.
Analysts suggest that Samsung needs to recalibrate its strategy by balancing its online and offline offerings, focusing on consistent pricing, and supporting retailers to avoid further losses. Faisal Kawoosa, analyst at TechArc, also warned that Samsung should be mindful of Apple’s rise in India and Google’s growing focus on the market with its India-made Pixel smartphones in the premium segment.
As Samsung grapples with these challenges, the upcoming festive season will be crucial for the company to address its inventory issues and reconnect with offline retailers, or risk losing further ground to its Chinese competitors.