South Korea's Samsung Electronics is already in the chasing position in the field of smartphones and flat-panel TVs. Samsung has been catching up with Japanese companies and expanding its market share based on emerging market countries. Now it is the territory where Chinese electronics manufacturers such as Lenovo and TCL attack Samsung in emerging market countries. Samsung plans to respond by turning to high-end models, but it is still possible to embark on the same path as Japanese companies that have lost their competitiveness.
Target low-income groups
Xi'an, Shaanxi, is a large city in the inland area of ​​China. In the rural area of ​​Fuping County, Weinan City, near its suburbs, the smartphones displayed in the mobile phone stores are all Chinese brands such as Lenovo. "Domestic mobile phones are cheap and have Internet access. Samsung is too expensive, and farmers cannot afford it," said the male owner of the mobile phone store. The best-selling products here are all low-cost products of about 500 yuan.
Speaking of Xi'an, Samsung has built a semiconductor factory here, and South Korean President Park Geun-hye visited here in June. Samsung smartphones are placed in front of large-scale household appliance retail stores in the city. However, in the suburbs and rural areas with lower income levels, this situation has changed.
Samsung occupies the first place in the Chinese mobile phone market, but its market share is declining. According to statistics from the survey company Analysys International, Samsung's shipment share from January to March 2013 was 17.0%, a decrease of 8.4 percentage points from three years ago. Instead, the rise of Chinese brands such as Lenovo.
In China's flat-panel TV market, Samsung's plight is particularly obvious.
"There is no difference between quality and Samsung." In home appliance retail stores, TCL LCD TV sales staff are marketing with a confident expression. TCL and Samsung have established a cooperative relationship with each other to supply the core components of LCD panels. It is difficult to make a difference in terms of image clarity.
From the price point of view, compared with Samsung's 40-inch products, TCL is 1,000 yuan cheaper, only about 4,000 yuan. In overseas emerging markets such as Southeast Asia and Central and South America, TCL's shipments in 2012 increased by 70.4% over the previous year, achieving a substantial growth.
Chinese companies will attack Brazil with higher incomes in emerging market countries. Lenovo acquired the Brazilian electronics company Digibras Group in January this year and has put the new plant into operation. Foritas, chief analyst at IDC, an American survey company, said that Lenovo, which ranks seventh in the Brazilian PC market, will "become among the top three in three to five years."
Follow Samsung's advertising methods
Lenovo ’s marketing follows Samsung ’s model of spending heavily on advertising for sports events. In its advertising, Lenovo used football players Ronaldo Jr. (Brazil), American NBA player Kobe Bryant and other stars, and sponsored large-scale events such as the Beijing Olympic Games.
In addition, Chinese companies are also very interested in Myanmar, an emerging market country. Chinese companies Huawei Technologies and ZTE will catch up with Samsung in the field of smartphones. During the year, Huawei will open 40 specialty stores in Burma, enter 100 home appliance retail stores, and increase the number of product display counters by 2,000.
Chinese companies that focus on low-priced products suffer from low returns. However, both Japanese and Korean companies have gone through the same stage and improved their profitability by expanding their global share. For Samsung, there will be no doubt that Chinese companies will become an existence that cannot be underestimated.
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