Samsung Electronics is manufacturing online products that will be sold in India. It is an optimized strategy for markets in India that have weak offline sales network.
According to industry on the 10th, Samsung Electronics is currently manufacturing cellphones and TVs that will be only sold through India’s online distribution network. Xiaomi, Motorola, Lenovo, Micromax and others had already pioneered online network in India markets and have been increasing market shares.
According to a market research organization called IDC, Samsung Electronics held 23% of market share in second quarter of last year based on number of sales in India’s Smartphone markets and maintained its position of top business since 2012. However its market share has started to decrease as competition of inexpensive Smartphones has recently became more competitive in China, India and others.
Samsung Electronics’ strategy to strengthen its online sales has come from the fact that competitions have became more fierce. Starting with Smartphones that had captured top position in market shares, it is trying to expand towards household appliances such as TVs and others.
“Through reorganization of Samsung Electronics that happened end of last year, online channel department was newly established for its corporate body in India.” said a representative for Samsung Electronics. “We thought of such strategy to respond to India markets that are quickly growing and to maximize effect of sales.”
India is world’s second biggest Smartphone market after China.
100 million Smartphones were sold in India in past year and 3 out of 10 Smartphones were sold online. Online transaction of Smartphone takes up 11% of India’s entire e-commerce markets. Considering that purchase of Smartphones through online in South Korea is less than 5%, purchase of Smartphones through online has become a norm in Indian markets.
Although percentage of picture-phones is still higher than Smartphones, possibility of market growth is still high as supply rate of Smartphones with young people at the center has increased rapidly.
“Retail channels where electronic devices such as Smartphones and others can be purchased lack in many cities in India.” said Vice-President Tony Navin of Snapdeal which is India’s biggest e-commerce business. “Retail margin is also low for online channels and they are sales channels where both sellers and buyers can make profits.”
It is heard that not only is Samsung Electronics is manufacturing electronic devices that are for online sales in India, it is also pushing to establish online distribution channels that will be directly managed by Samsung Electronics. Samsung Electronics is implementing two-track marketing strategy through inexpensive Smartphones such as Tizen263 Z1, Galaxy J1 and others that cost less than $100 and premium Galaxy Smartphones.
Staff Reporter Park, Sora | srpark@etnews.com
