SHANGHAI :
Sales Volume of Samsung Mobile Handsets in China Slumps, Forcing Company Into Restructuring
Xu Wei
DATE:  Jul 20 2017
/ SOURCE:  Yicai
Sales Volume of Samsung Mobile Handsets in China Slumps, Forcing Company Into Restructuring  Sales Volume of Samsung Mobile Handsets in China Slumps, Forcing Company Into Restructuring

(Yicai Global) July 20 -- The global sales volume of Samsung mobiles in the first half of the year has not been disclosed yet, but the South Korean technology giant witnessed a sharp decline in Samsung mobile phone sales in China's offline market, according to figures quoted by the Securities Daily.

The sales volume of Samsung mobiles in the first half of the year in the offline market dropped 65.8 percent, the Daily said, citing Sino Market Data. A mobile phone retailer was also quoted as saying that he sold only two sets of new models of Samsung mobile phones in the first half of the year. "This shopping mall has 20 stores selling mobile phones, and only about 300 Samsung mobile handsets were sold in the first half of this year," he said. The area where the store is located is economically developed and is among the top 100 counties in China although it has not been named in the report.

Commenting on the slack sales volume of Samsung mobiles in the first half of the year, the store owner said "exploding" Samsung Galaxy Note 7 handsets have been an important factor behind the falling sales. "Moreover, the price of Samsung mobile handsets dropped rapidly, and the dealers are unable to afford the high price. Vivo manages its prices favorably, and offers price protection," he claimed.

He also believes the fact that Samsung has no agent in the unnamed region plays a role in the low sales volume. "Samsung dealers are like characters in a legend. No one sees them. The only authorized Samsung store is here, but it doesn't reach out to wider customer base," he said.

Samsung may have realized it. Some media reports suggested that from July 1, 2017, China Samsung Electronics will close seven supporting branches. They will be restructured into 26 offices and stores. Managers will be appointed to run each office and store.

Samsung China confirmed the media reports about restructuring. Observers believe that restructuring may be related to low sales volume of the company's latest flagship mobile phone, Samsung Galaxy S8, failing to reach expected sales target.

Samsung Electronics has not commented on the issue officially, but a senior manager was quoted by the media as saying that Samsung should strengthen retailing ability of its sales channels. Excessive layers of branches may go against sound marketing principles. In addition to competitive pressures of external environment, streamlining the branches can help offices adapt to ever-changing competition modes by rapidly adjusting the sales plans. 

The report also said after hot sales in the early stage, Samsung S8 is suffering slack sales of late. Samsung sold 9.8 million Galaxy S8 sets in the first two months after unveiling it, 20 percent lower than the 12 million Galaxy S7 sets it sold during the same period last year.

Follow Yicai Global on
Keywords:   South Korea,SAMSUNG,TECHNOLOGY,S8,MOBILE,Galaxy,Phone,Branch,MARKETING