Samsung on Wednesday announced an investment of Rs. 49 billion ($760 million) in India to expand its existing factory in Noida, Uttar Pradesh. The company is already believed to have bought 35 acres of land for the purpose. Samsung manufactures quite a few of its consumer electronics products at its Noida factory, including smartphones, refrigerators and television sets. According to sources quoted by sections of the Indian financial media, this is the largest investment Samsung is making in the country, and is expected to double the company’s smartphone and refrigerator production capacity at the factory by 2020. The investment is also believed to be a counter against what the company sees as a threat to its leadership position in the country because of the phenomenal rise of several Chinese vendors over the past couple of years. The company is also expected to make the facility a manufacturing hub for its exports to Europe, Middle East and Africa.
Samsung is one of the leading vendors of electronics goods in India, and leads the smartphone market in the country ahead of Chinese rivals such as, Xiaomi, OPPO, Vivo and Lenovo. While the South Korean behemoth has maintained its leadership position in the Indian smartphone market for years, many Chinese brands, including the aforementioned ones, have also started making a big impact on the country’s smartphone landscape over the past year, cornering over 50 percent of the country’s thriving smartphone market, and muscling out local vendors such as, Micromax and Intex from the top-five with faster hardware, lower pricing and a generally-better user-experience overall. In an effort to prevent a further erosion of its market-share in the country in a repeat of what happened in China earlier this decade, Samsung signed a memorandum of understanding (MOU) with the Uttar Pradesh government last year, although, the initial investment was only said to be about Rs. 20 billion ($300 million). Once fully operational, the plant will reportedly be able to produce around 120 million smartphones per year.
It is easy to see why Samsung is so bullish on India. The country is currently the third-largest smartphone market in the world after China and the U.S. and is growing significantly faster than either of the two global leaders. According a recent report from Counterpoint Research, the country’s smartphone market grew by a staggering 18 percent last year, compared to a mere 3 percent growth rate globally. Industry insiders and market analysts expect India to soon overtake the U.S. to become the second-largest smartphone market after China. Going by Samsung’s latest decision to increase its investment in India, looks like the company isn’t ready to play second fiddle to Chinese brands in the country, like it now has to do in the world’s largest smartphone market.