Samsung products have been in trouble in China because of its arrogance and disregard for Chinese users.

As one of the world's top technology companies, Samsung has no shortage of hot topics. In the past six months, we have been frequently bombarded with news about the death of Samsung's head Lee Kun-hee and the sentencing of its crown prince Lee Jae-yong.

Wait, something seems wrong – why is this high-tech company always in the news in China about these things, rather than its products?

This highlights from one side the difficulties Samsung is facing in the Chinese market - Samsung products are moving away from us.

Faced with the fiercely competitive Chinese market, the prices of Samsung's consumer electronics products are not friendly and have always been insufficiently competitive. For example, if you are not a "die-hard fan" of the technology industry, how many people know that Samsung has just launched its 2021 flagship product, the Galaxy S21 series?

While we are discussing Huawei, Honor, Xiaomi, and OV all over the screen, Samsung's market share in China, represented by mobile phones, has already dropped to the level of "others".

Samsung's complete defeat in the Chinese market

The main reason why Samsung didn't even promote its flagship products this year, apart from the fierce market competition, is probably because Samsung's presence in the Chinese market has continued to decline, and Samsung headquarters has become somewhat uninterested. Otherwise, it cannot explain why Samsung headquarters would just watch Samsung gradually become a vegetable in China, the world's largest single market.

In July 2020, Samsung's mobile phone market share in China was only 0.8%. According to IDC data, in 2018, Samsung's mobile phone sales in the Chinese market were only 3.34 million units, with a market share of less than 1%.

These two "similar" data at different times illustrate a problem. Samsung mobile phones have not expanded their market in China for three consecutive years. Therefore, it is not surprising that Samsung has adopted a free-range policy for its new flagship Galaxy S21 series.

In fact, smartphones are just one aspect of Samsung's retreat in China. Currently, all of Samsung's consumer electronics products that can be linked to the "future" have suffered the same "retreat" fate in the Chinese market.

Taking TV products as an example, in 2018, Samsung's TV market share in China was only 1.7%. Although it has improved in the next two years, it has never exceeded 2%. In comparison, even Huawei, which only entered the smart TV market in 2019, had a market share of 2.2% in 2020.

If the decline in the terminal market can still be reversed, then Samsung's gradual abandonment of its manufacturing base in China indicates that Samsung has strategically given up on the Chinese market.

In October 2019, Samsung closed its last mobile phone manufacturing plant in China, the Huizhou plant in Guangdong. A year later, Samsung closed its only TV factory in China, the Tianjin plant.

It is believed that the previous mission of these two factories was to meet the terminal needs of Samsung in the Chinese market. The closure of these two factories is equivalent to announcing in disguise that Samsung has no hope for the Chinese market.

All because of “one explosion”?

Why did Samsung, once as strong as Apple, fall to this point in the Chinese market?

Since Samsung is so famous and its history in China is extremely contrasting, there are countless discussions online. Interestingly, most of the articles discussing Samsung's situation in China attribute the cause of Samsung's decline to the explosion of the Note 7.

From the perspective of market share, this view does make sense.

IDC data shows that Samsung's mobile phone market share in China was 19.7% in 2013. In August 2016, Samsung released the Galaxy Note 7, which subsequently exploded one after another. Although Samsung promptly announced the recall of the Galaxy Note 7, the recall policy did not apply to the Chinese market, and Samsung secretly blamed the explosion on "users using external heating."

Samsung subsequently paid the price for its arrogance. At the end of 2017, Samsung's mobile phone market share in China was less than 1%, and its market performance has remained low ever since. Moreover, it has not apologized or compensated the users and rights activists injured in the explosion.

Did Samsung phones really "explode" themselves in China? This view emphasizes the contingency, that is, if the Note 7 explosion had not occurred, Samsung might still shine in the Chinese market. However, it is not believed that Samsung's decline in China is inevitable due to its arrogant strategy, that is, even if the Note 7 explosion had not occurred, Samsung would still fail.

The explosion of Samsung Note 7 is just a "small stage change" in the general trend of Samsung's decline in China.

Without discussing other more grand issues, just from the product perspective, around 2015, with the overall rise of domestic mobile phone brands, except for Apple, most products in the mobile phone industry were difficult to get a brand premium, but Samsung still ignored the market rules and set incredible prices for its mid- and low-end products.

Take the Samsung GALAXY A7 as an example. It was released at the end of 2015. Although it only carries the Qualcomm Snapdragon 615 processor, it is priced at 2,999 yuan. In comparison, the Xiaomi 5, which was released at the same time as the Samsung GALAXY A7 and carries the Snapdragon 820 flagship processor, is priced at only 1,999 yuan.

Of course, Samsung dares to set prices at will because it has unique technical advantages. For example, Samsung mobile phones and Samsung TVs have been the only ones in the world with OLED panels. In this regard, Dong Min, deputy secretary-general of the China Electronics and Video Association, said: "Samsung TVs sell panels, while domestic color TVs sell functions."

But the problem is that consumers buy products to use, not to use as vases. Let’s look at Apple. Although it is similar to Samsung, it has exclusive chips, Face ID, linear vibration motors and other technologies. However, on this basis, Apple is more about weakening the “geek” nature of its products through humanized interaction, and meeting the needs of ordinary consumers to a greater extent.

Because of its arrogant attitude and contempt for Chinese users, Samsung got what it wanted. In addition, the so-called "technological" high ground that it is proud of is also facing the dilemma of being lost.

The "technical" high ground is lost

We cannot deny that although Samsung has already been defeated in the Chinese market, in the international market, Samsung still plays a leading role in many consumer electronics fields.

Strategy Analytics data shows that Samsung's mobile phone shipments in 2020 were approximately 270 million units; Omdia data shows that Samsung's global TV sales in 2020 were approximately 49 million units.

But beyond this, we can also see some other data - after 9 consecutive years of shipments exceeding 300 million units, in 2020, Samsung's mobile phone shipments fell below 300 million units for the first time.

In addition to the fact that the smartphone market is no longer prosperous, this is largely due to the strong overseas expansion of Chinese mobile phone brands. According to Canalys data, in Q3 2020, OPPO's market share in Europe reached 3%, a year-on-year increase of 396%. At the same time, Xiaomi's market share in the global market also reached 13.5%, with a growth rate far exceeding Samsung.

The situation is similar for TVs. According to TrendForce data, in Q3 2020, although Samsung TV still ranked first in market share, three of the top five smart TV brands were taken by Chinese brands. Among them, TCL TV shipments, which ranked third, increased by 52.7% year-on-year, maintaining a strong upward market trend.

Indeed, just like foldable screen mobile phones, with cutting-edge technology, Samsung's current products do create a differentiated experience that other brands can hardly match, but what if Chinese brands also have cutting-edge technological advantages?

In fact, this is exactly the development direction that Chinese local brands are currently focusing on.

Take TCL as an example. Its semiconductor display companies represented by CSOT not only control the cost of terminals, but also deploy the most cutting-edge technologies. Zhao Jun, vice president of TCL Technology and senior vice president of TCL CSOT, said: "TCL CSOT expects to produce Micro LED watches in 2021 and enter the field of Micro LED commercialization. At the same time, it adopts splicing or large-scale solutions to continuously improve the speed and accuracy of mass transfer, and enter the Micro LED large-screen and automotive markets from 2023 to 2024."

Coincidentally, in November 2020, BOE also released Mini LED backlit LCD panels and Mini LED direct display screens, and joined hands with China's leading large-screen companies to launch a large-screen storm. Gao Wenbao, executive vice president of BOE and CEO of display business, said: "Mini LED backlight is one of the important directions for LCD panel upgrades, which will cover scenarios such as automotive, medical, monitors and ultra-large-size TVs."

Considering that Samsung has strategically abandoned the LCD panel production line that allows its products to maintain price advantages, and has shrunk its battle line to focus on the high-end panel industry, once Chinese local companies make a leap forward in high-end display panels, will Samsung's products still have an absolute market advantage?

From this perspective, Samsung’s many difficulties in China may be similar to those of Note 7. In fact, they are just a “trigger”. What really made Samsung explode was its contemptuous attitude of “disdain” towards the Chinese market.

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.