In terms of sales, the country’s largest electronics manufacturing firm Samsung India has decided that it will not fight the price war with the army of Chinese brands. The company is reducing focus on the entry-level smartphones and television segment, in which the Chinese brand dominates by launching products at much lower prices.
Large scale cost cutting
Three industry executives said that Samsung India has also done large scale cost cutting. It has discontinued sales support functions such as sales planning, market hygiene and order punching at shops. Sales support functions will now be seen by the company’s core sales team. According to a rough estimate, more than 600 jobs can go through it, but the actual number of jobs that will go is not confirmed.
Branch office number will be reduced
Executives said that Samsung is going to streamline its operations in India. It will bring the number of branch offices below 50 and will keep hiring except for important rolls. The heavyweight Korean electronics giant’s revenue is decreasing in India due to a tough competition from China’s Xiaomi, OnePlus, Vivo, Realme and Oppo. Samsung India has taken this decision in view of this.
Profits fell more than 60% in two financial years
Samsung India’s profits have fallen by more than 60% in the last two financial years from entering the price war with Chinese brands. The company reported a net profit of Rs 1,540 crore in FY 2018-19 against a peak of Rs 4,156 crore in FY 2016-17. In the last financial year, Samsung India had revenues of about $ 10 billion (Rs 73,086).
Samsung wants profitable growth
A senior executive of a leading electronics retail chain said, “Samsung wants profitable growth, so in addition to mid-to-premium smartphones, it wants to focus on televisions that are 32 inches and larger, which still have a big margin.” It has also decided not to enter into any price war with Chinese brands.
Samsung India did not give direct response
Spokespersons at Samsung India did not react directly to changes in product strategy, cost cutting, including job losses, when contacted. He said, “Samsung is committed to business in India and will continue to invest in all business here.” The company has created 2,000 new employment opportunities in the last one year and the Indian operation is growing, so the company will hire for all businesses.
Spokesperson of the company said, “When we do job creation, we adjust resources according to our business priorities for strengthening the business and for long term success.” As far as business is concerned, it has been able to strengthen the market share by bringing new products in every category. For us, this year will also be a record year.