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In early 2008, Samsung Telecommunications
India Pvt. Ltd. (Samsung India) announced that it was taking
various strategic initiatives to increase its share in the
mobile phone market in India.
The strategy included bolstering its distribution network,
rolling out a number of mobile phone models in all price
segments, and adopting a new positioning for the brand supported
by celebrity endorsement. With these initiatives, the company
aimed to increase its market share in India by 100 percent in
2008.
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Sunil Dutt (Dutt), country head (mobile business),
Samsung India, said, "We are looking at doubling our market share to 15
per cent in 2008, which at present is around 7-8 per cent. The company
will make required investments in building the brand, expanding channels
and rolling out new models."1
Samsung India, the 100 percent subsidiary of Samsung Electronics Co.
Ltd.2 (Samsung), had a
manufacturing unit at Noida and also imported high-end mobile phones
from the parent company. Samsung, which had firmly established itself as
the No.2 player in the global arena in 2007 with a 14.3 percent market
share,3
trailed Nokia, Motorola, and Sony Ericsson in India.
With Nokia's market share dropping from 78 percent in 2005 to 48 percent
in 2007 and its stranglehold on the Indian market loosening, its rivals
including Samsung were gearing up to boost their market share further.4
Analysts expected fierce competition in this market as all the companies
viewed India, which had emerged as the world's fastest growing mobile
phone market, as a key market.5
Earlier in 2006, Samsung India had planned to increase its market share
to 20 percent by 2008, focusing primarily on the mobile phone
replacement market6.7
With this in mind, the company had discontinued its cheaper
monochrome-screen models and focused on offering sleek and stylish
mobile phones.
Its slim phones, in particular, were popular with a segment of the youth
population. However, its market share continued to hover at around 10
percent.
In March 2008, Samsung India strengthened its distribution network. It
signed an exclusive agreement with some 40 distributors who had earlier
been working with the market leader Nokia.8
With the addition of SSK and Link to its two existing regional
distributors Telemart and United Telelinks, it had four distributors
operating on a regional basis.9
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1] "Samsung Telecom Eyes 15% in Indian Market," www.business-standard.com, March 14, 2008.
2] Samsung Electronics Co. Ltd., headquartered in
Seoul, South Korea, is one of the world's largest electronics companies. Its
revenues for the fiscal year 2005 were US$ 78.99 billion.
3] The global market share of Nokia Corporation
(Nokia), Motorola Inc. (Motorola), (Sony Ericsson Mobile Communications AB) Sony
Ericsson, and LG Electronics Inc. (LG) were 37.8 percent, 13.4 percent, 8.8
percent and 6.8 percent respectively (Source: "Global Mobile Phone Sales
Surpassed 1.15 Billion Units in 2007," www.techgadgets.in, March 1, 2008.)
4] "Nokia Losing Market Share in India. SE and MOTO
on a High," www.esato.com.
5] Ruth David, "Nokia, Reliance Pursue India's Poor,"
www.forbes.com, May 7, 2007.
6] The mobile phone replacement market was already a
huge market accounting for more than half of the units shipped as consumers
replaced their existing mobile phones with those with more advanced features.
7] "Samsung Eyes 20% Market Share,"
www.mobilepundit.com, July 19, 2006.
8] "Samsung Dials Nokia Distributors to Grab Market
Share," www.hindu.com, March 6, 2008.
9] "Aamir Khan is Samsung Mobile's New Brand
Ambassador," www.indiantelevision.com, March 12, 2008. |
