News on December 20, according to foreign media reports, according to industry insiders,Under the direct supervision of Vice Chairman and CEO Han Zhongxi, Samsung has established a new Chinese team, which marks a change in Samsung’s strategy to re-enter the largest market in Asia that is already dominated by local manufacturers.
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According to industry insiders, Samsung Electronics’ new special team called China Business Innovation Team is dedicated to various businesses from mobile phones to semiconductor chips, with the goal of achieving sales breakthroughs in one of the world’s largest IT markets.
The new team consists of two departments, one supports human resource management and marketing, and the other consists of members from the mobile devices, home appliances, displays, and semiconductor departments. The team will report directly to Vice Chairman Han Zhongxi, who is the head of the newly merged mobile devices and home appliances division DX (Device Experience).
An industry insider said: “This move can be interpreted as a turning point for Han Zhongxi to directly seek to create in China.” Samsung declined to confirm the launch of the team.
China has always been a key market for Samsung, accounting for the largest share of its total sales. In the third quarter of this year, China accounted for 30% of the company’s total global sales, followed by the United States with 29%, other Asian markets and Africa with 16.4%, and Europe with 12.6%.
In the executive reorganization earlier this month, Han Jong-hee, who leads Samsung’s TV business, was promoted to vice chairman. He is now in charge of the DX department, including visual displays, digital appliances, health and medical equipment, MX (mobile phones and tablets), and network operations.
In the past few years, Samsung’s development in China has not been smooth, especially in the smartphone business, where its market share is less than 1%. For Samsung, which occupies the largest share of the global smartphone market, this is disappointing.
Data from Counterpoint Research, a market research organization, shows that between 2013 and 2014, Samsung’s share of the Chinese market exceeded 20%. But starting in 2019, this share has dropped sharply to less than 1%. Vivo, OPPO, Honor and Xiaomi accounted for a total of 72% of China’s smartphone shipments, making them the top four smartphone suppliers in China in the third quarter.
In addition, people are still paying attention to whether Samsung will seek to reverse the trend of layoffs in China in recent years. As of 2020, Samsung’s China business has approximately 18,000 employees and executives, a 40% decrease from 2018. According to Samsung’s data, in 2020, its net sales in China dropped by 12.5% in total to 37.8 trillion won (31.9 billion U.S. dollars).
Industry analysts said these declines are attributable to the rapid growth of local Chinese mobile phone manufacturers. Although Samsung’s foldable mobile phones have been well received worldwide, its new products have not aroused strong interest among Chinese consumers. As Chinese mobile phone manufacturers scramble to release their own versions of foldable phones, the competitiveness of the Samsung Galaxy smartphone brand in China has not shown signs of recovery.
Supply chain management issues also affected the establishment of the Chinese team. Samsung operates a memory chip manufacturing plant in Xi’an and a chip packaging plant in Suzhou. In particular, it is worth mentioning that the Xi’an plant is Samsung’s only overseas memory chip production facility.
More and more people are speculating that Samsung’s actual person in charge, Lee Jae-yong, may visit China soon. After being released on parole in August, he flew to Canada, the United States and the Middle East to look for new business opportunities in the post-new crown epidemic era. (Little)
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