Samsung mobile phones fall out of favor in Asia as Chinese and Indian users prefer domestically made phones

The Wall Street Journal reported that there are signs that Samsung's lead in Asia's two fastest-growing mobile phone markets, China and India, is waning, mainly because consumers in those countries are turning to local brands.

Hong Kong-based data provider Counterpoint Technology Market Research said on Tuesday that Samsung was no longer the top-selling mobile phone manufacturer in India in the second quarter, but was surpassed by Indian local brand Micromax Informatics, which was only founded five years ago.

Another market research company Canalys also released data on Tuesday showing that in the second quarter, Micromax's sales share in the Indian mobile phone market was 17.5%, higher than Samsung's 15.1%. However, if only smartphones are considered, Samsung is still in the lead.

Earlier this week, Canalys said Xiaomi had surpassed Samsung to become the top smartphone vendor in China. In the second quarter, Xiaomi's market share in China was 14%, surpassing Samsung and Lenovo, which both had 12% market share. Xiaomi's market share grew significantly in the second quarter. In the first quarter, Xiaomi and Samsung had market shares of 10.7% and 18.3%, respectively.

The figures reflect an unfavourable trend for Samsung, which last week reported a 20 per cent drop in second-quarter net profit from a year earlier. It was the first year-on-year drop in quarterly profit in nearly three years. Samsung declined to comment on the latest figures.

Samsung remains the top smartphone vendor in Southeast Asia thanks to aggressive marketing and branding, but its market share has declined over the past year in Indonesia, Malaysia and Vietnam, markets with a combined population of about 360 million, according to Counterpoint.

In the Philippines and Thailand, Samsung remains ahead of local vendors and global rivals such as Apple, though Apple has gained market share in those markets over the past year.

"Overall, Samsung is facing a lot of pressure in the low-end market in India and China," said Jessica Kwee, an analyst at Canalys in Singapore. She noted that Samsung mainly faces competition in these markets from local brands that are trying to offer better value for money.

Competition from these companies will continue to weigh on Samsung's profitability. In the second quarter, Samsung's mobile business operating profit margin fell to 15.5%, down from 17.7% in the same period last year. It was the lowest profit margin for the business since the end of 2011.

The situation is partly due to competition and partly to Samsung's own problems, especially in China, where it has suffered from poor inventory management, leading to a glut of 3G smartphones as Chinese consumers gradually opt for 4G phones.

Counterpoint's monthly data shows that Samsung's market share in China peaked in February this year, then steadily fell back to about 17% in June. Lenovo and Huawei are not far behind Samsung, with both companies at about 14%.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.