Poor Sales force Samsung to permanently halt Smartphone Production in China

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Samsung has confirmed that it will cease production of all its smartphones in China as it closes its very last factory there. The reason given by the Korean tech giant for this bold decision is poor sales of its devices in that region. Now, you may be wondering how on earth could a global brand like Samsung have poor sales, to begin with. Well, if you’re unfamiliar with the Chinese market, you’re in for a surprise.

There was a time, back in 2013, when Samsung actually did good in the sales department, having a 20% share in the Chinese smartphone market. However, as years passed, small local Chinese brands like Huawei, Xiaomi, and Oppo arose. Their devices offered a good amount of performance and amenities for a much lower price. Let’s also not forget that since they were Chinese brands, the Chinese people preferred them over any other foreign name.

Image: New York Magazine

This had a dramatic effect on Samsung’s sales to the point where, in 2016, that 20% was reduced to a mere 4.9%. Unfortunately, things only went South from there as, throughout 2018, Samsung tried hard just to have 1%. This was just the case in China, while in the rest of the world, Samsung phones dominated.

According to an interview with Reuters, the company stated that “The production equipment will be re-allocated to other global manufacturing sites, depending on our global production strategy based on market needs”. This does seem like a smart move as it’s always better to spend your resources in places where they can give a good return. Our guesses for the new locations for the equipment are India and Vietnam.

However, all this doesn’t mean Samsung won’t be selling its phones in China anymore. That will, most likely, keep happening. Samsung will be importing its flagship smartphones from the Galaxy S and the Galaxy Note series. Other than this, the Korean brand will also focus on its Original Design Manufacturer (ODM) business.

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