How Samsung is beating Apple in China
Updated: 2013-07-26 16:01
(Agencies)
|
||||||||
RETAIL PRESENCE
Samsung opened its first office in China in 1985 in Beijing - an era in which it was all but inconceivable that Apple and Samsung would end up in one of the world's most intense corporate grudge matches. Like other South Korean chaebols, Samsung was a first mover in China, using the market primarily as a base to produce electronics for the world.
In contrast, Apple's big push in China came only recently, with the advent of the smartphone age roughly five years ago.
The early entry gave Samsung an undeniable edge, and it adapted fast to a rapidly changing environment. By the mid-1990s, with the economy booming, Samsung made the strategic decision to treat the Chinese market not just as a production base, but to start marketing to China higher-priced electronics, said Nomura researcher Choi Chang-hee, who wrote a history of Samsung's experience in China.
That shift has meant Samsung's retail presence in China far outstrips Apple's. Aside from selling via the distribution outlets of the three major telecom carriers, Samsung also has a strong retail presence through its partners Gome Electrical Appliances and Suning Commerce Group, as well as its own "Experience" stores and small retailers all over the country.
Apple works through the same channels, but its relatively late entry means it has a significantly smaller presence. Samsung, for example, has more than 200 official distributors and resellers in Guangzhou province, while Apple lists 95.
FIGHTING HIGH AND LOW
Samsung now leads in both low-end and high-end segments in China, according to IDC, and its logic of going after both ends of the market is straightforward. In China, where the average wage is roughly $640 per month, many users looking to upgrade from feature phones to smartphones cannot afford Apple.
By bracketing the market with multiple models, Samsung can breed deep relationships with customers, many of whom, market research shows, trade up to more expensive models as they get older. Playing high and low also positions Samsung to fend off the intensifying competition from Chinese firms such as Lenovo and Huawei and literally hundreds of smaller local players.
"That's where the next battle for Samsung will be fought," said Newman. "We'll have to see if Apple does introduce a new, cheaper model for China and the world."
- LeBron frenzy grips Guangzhou
- Police to question driver for Spanish train crash
- Top DPRK leader meets Chinese vice-president
- US does not plan decision on Egypt coup
- Bo Xilai indicted for corruption
- Korean War veterans return to peninsula
- Tourist safety a priority in S China Sea
- Death toll in Spain train crash rises to 77
Most Viewed
Editor's Picks
Attractive Cities for Foreigners |
Terraces on top of the world |
No summer relief for kindergarten |
Safety worries mount |
Giving ancient Lhasa a facelift |
Families feel the pull of 'gravity' |
Today's Top News
Scholars provide a tour 'around the world'
GM says weakness in Asia leads to profit drop
Details of GSK China's alleged violations revealed
Syrian rebels ask Kerry to send US arms quickly
Flights over sea 'routine training'
US does not plan decision on Egypt coup
Congress approves NSA spying program
Japanese PM unlikely to visit Yasukuni Shrine
US Weekly
Geared to go |
The place to be |