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Samsung to Follow Xiaomi’s Lead in Attacking the Asian Market with On-Line Sales

March 23, 2015 - Written By Cory McNutt

Now that Samsung has announced and is ready to soon start selling their new Galaxy S6 and Galaxy S6 Edge in the US and other major markets around the world, they are now focusing on their dismal sales in the Asian countries.  Samsung can compete head-to-head with Apple in the high-end department, but when it comes to the low-to-midrange sales, it is losing out in a big way to the likes of Xiaomi, who have now surpassed Samsung in both China and India sales.

One way for Samsung to increase profits is to decrease expenses, such as it huge marketing campaigns that are so effective in some areas.  It looks like Samsung is going to steal a page from Xiaomi’s marketing strategy by doing away with those expensive advertising plans for the low-end market, and use the most popular, existing online channels in India, Vietnam and China to push its smartphones directly into the hands of the consumer.  A senior executive at the supplier said, “Vendor relations always matter to Samsung Electronics.  If Samsung sells more of its smartphones via its online channels, then it can save a huge amount in costs.  This is also good for consumers as Samsung may provide handsets with more of a discount.”

Samsung has to walk the fine line of increasing sales, without upsetting the carries that they relied on in the past to sell their devices.  Carriers would receive a discount on the devices that allowed them to make a profit and offer promotional deals.  However, another executive from another subcontract said that Samsung has been watching how Xiaomi operates and how fast the company made an impact in sales and it was all through online selling.  He said, “One interesting point is that Xiaomi only sells its handsets via its official websites.  Samsung management believes this strategy was one reason that helped the Chinese smartphone producer improve its bottom line in such a short time.”

It is unlikely that Samsung would apply this strategy anywhere else, such as in Europe or the US, but they are in a good position to try this in the Asia-Pacific region.  With 53-percent of the global sales coming from this region, it is more important than ever for Samsung to develop their Asian strategy.  The executive said that “As Samsung is shifting its focus towards budget handsets in Asia, it intends to implement the direct online sales marketing strategy in selected countries.  This strategy will be effective for Samsung to up its share at less cost.”