What can Samsung learn from Apple if it wants to return to China?

2022-05-30 0 By

After years of being out of the Chinese market, the signal of Samsung’s return to the Chinese market is clear from the current trend.According to media reports, Samsung Electronics began a major reshuffle in December 2021 to merge its three business divisions — smartphone, consumer electronics and semiconductor — into the SET division under han Jong-hee, then head of the video display business.In addition, Samsung set up the Chinese market innovation group and jingdong signed the “2022 strategic cooperation agreement”, recently also fully sponsored the Beijing Winter Olympic Games, released the Samsung Galaxy Z Flip3 5G Olympic commemorative edition.Samsung is said to have spent nearly 30 million yuan on custom-made computers and other small gifts for the Athletes.Whether it is the reshuffle of senior executives, the sponsorship of the Beijing Winter Olympics or the recent launch of Samsung Galaxy S22 series, all point to a clear signal of Samsung’s return to China.However, Samsung’s return to the Chinese market does not seem to have a good understanding of the pain points of Chinese consumers, judging from the “as usual high price” reviews of the new phone.At its peak, Samsung had more than 20 per cent market share in China.The explosion of Note7 series in 2016 was a turning point for Samsung in the Chinese market. Since then, Samsung has never recovered, gradually shutting down its factories in China and moving its mobile phone manufacturing plants to India and Vietnam.Strong global brands in the same high-end market once held the top position in China’s high-end mobile phone market, but Samsung and Apple are in a completely different situation in the Chinese market.The Note7 incident exposed the shortcomings of Samsung’s pr marketing, local consumer research and lack of understanding of positioning. The Note7 incident became a key point of Samsung’s decline in the Chinese market. In fact, if we review this incident, we will find that Samsung did not know how to cater to the emotions and psychology of Chinese consumers in pr marketing.There is also a lack of understanding of local consumer research and its own positioning.In the wake of the Note7 explosion, Korean consumers demanded that Samsung treat the domestic market as the same as the rest of the world.Secondly, due to personal safety concerns, most people have been afraid to buy the phone.After all, the note7 had already exploded in many overseas markets around the world, and judging from the attention paid to it at the time, most consumers already had personal safety concerns about the product.As a multinational company, it should take such consumer psychology into account.From the perspective of enterprises, consumers’ personal safety is also an insurmountable bottom line, which has nothing to do with profits and brands, but the basic responsibility of enterprises.At that time, Samsung gave the excuse and reason for not recalling — Samsung has a complete optimization process and independent supply system in China, and the Note7 domestic version sold in the Chinese market uses a different battery supplier, which is not within the range of replacement, so consumers can continue to buy at ease.In fact, according to relevant information, on September 18, 2016, there was a second explosion of Samsung Note7 in the Chinese mainland.On The evening of September 19, Samsung issued a statement saying that a detailed analysis of the product by Samsung Electronics Research Institute and quality inspection Center departments concluded that the damage was caused by external heating.The Chosun Ilbo, a South Korean newspaper, later published an article saying that X-ray and CT analysis of the two phones showed that there were signs of intentional heating on the outside of the batteries. At the time, the newspaper also said that Samsung suspected that the phones were malicious acts by consumers to collect compensation.This kind of pr marketing completely drove Samsung’s reputation into the abyss.In fact, at that time, the Note7 had not been shipped in large quantities. If the Note7 had battery problems, the recall cost would be quite low compared with 2.5 million overseas.Let’s assume that Samsung also treated the Chinese market equally and recalled the Note7 in the Chinese market.Samsung’s reputation in this series has been damaged, but there is still room to recover, at least in the future in the Chinese market.At that time, Samsung was also accused of discriminating against Chinese consumers and causing the spread of market sentiment against Chinese consumers. In fact, this has something to do with Samsung’s brand impression on Chinese consumers for a long time in the past.After the Galaxy S3 was released in 2012, some phones could not be charged or turned on due to quality problems, according to industry sources.Samsung then discriminated: overseas customers were given free repairs or replacements, while mainland Chinese customers had to pay thousands of yuan for repairs.This is essentially a mistake of Samsung’s long-term public relations and marketing strategy in the Chinese market, as well as the lack of correct cognition of the status of Samsung mobile phones in the Chinese market and the shopping psychology of Chinese consumers.Samsung has always been competing with Apple and believes that it and Apple are indispensable high-end brands for Chinese consumers, overestimating the irreplaceability and user stickiness of its products in the Chinese market.This may be a cognitive error in its positioning towards the high profile of Chinese consumers.Samsung’s rise is, in fact, when domestic competitiveness has not been formed camp, smooth to eat into the domestic market growth in dividends, but with the domestic mobile phone step by step, whether it be a low-end market of millet, and mid-market OV, high-end market huawei with apple, every line of samsung has highly competitive rivals, samsung lack an irreplaceable competitive.For consumers in the Chinese market, there is no need to risk their personal safety to buy Samsung Note7 series, they have plenty of alternatives to choose from.Samsung is the only manufacturer in the mobile phone industry with a vertically integrated system layout of the whole industrial chain, including key components such as chips, memory, batteries and screens, which also improves the hardware performance of its products, such as the pioneering curved screen, iris recognition and the latest generation of flagship SOC.The hardware quality of each S and Note is the flagship product that can face the iPhone directly.But in fact, Samsung did not realize that consumers recognized a manufacturer’s brand premium not only for hardware, especially with the rise of domestic phones, which gradually weakened Samsung’s advantage in vertically integrated manufacturing.In the eyes of Chinese consumers, there is a certain gap between Samsung’s high-end brand tonality and Apple’s, which is due to Samsung’s optimization of software and hardware integration and its system experience.This is an important reason for its inability to hold up a high premium brand premium.We can see that Samsung’s understanding of the Chinese market is not deep enough, and it lacks a clear understanding of how Chinese consumers recognize Samsung’s brand and what position Samsung occupies in the hearts of Chinese consumers.If we want to trace the source, it may have something to do with Samsung’s system, channel and marketing design in the Chinese market.What can Samsung learn from Apple as it returns to China?Although there are differences between Samsung’s decline and Apple’s long-term stabilization in the Chinese market in terms of brand premium, technology, products and integration of software and hardware, apple has something to learn from Samsung in terms of soft power.Apple can mix quite popular in the Chinese market, in the product, an important reason is that its deeper understanding of the Chinese market, the localization of it do better, it is to the Chinese consumers care and please go deep into the all levels, from product usage scenarios to spending habits, the full range of enterprise culture and the local industry chain, etc.It also has localized marketing and channel strategies aimed at the Chinese market. For example, Apple has won a lot of fans for its long-term trading in old models in the Chinese market. It also supports smartwatch, computer and tablet deduction, which on the one hand improves the loyalty of existing users and on the other hand competes for Android users.For example, for the unique dual card and dual waiting in the Chinese market, the iPhoneXS series adopts the dual card and dual waiting function card slot in the Chinese market for the first time, which is not available in other global markets. This is also the precedent that apple has opened to change the hardware design for a single country.Starting from the iPhone11 series, based on Chinese consumers’ ridicule of the high pricing of iPhoneX series, apple started the price-cutting strategy to compete for the Chinese market with the cost-performance strategy. From the sales volume, the effect is self-evident.Since then, Huawei has been punished, Apple and Cook’s attitude towards the Chinese market, as well as their attitude towards Chinese supply chain manufacturers and consumer market, Cook’s attitude towards China has been consistent, and his words and actions have not made any big mistakes.Cook also stressed the importance of friendly relations between China and the United States, saying that “when China wins, the United States wins.”When asked whether China will ban Apple, Cook said in an interview that China has never targeted Apple. Apple has been doing business in China for a long time, and the two sides have always respected each other and maintained very good cooperation. I don’t expect anything like this to happen.In particular, Apple has had little direct conflict or war of words with any domestic manufacturer.From the perspective of its pricing strategy, service strategy, localization channels and system for Chinese consumers, Samsung is different from Apple in considering the psychological needs of Chinese consumers and catering to the emotions of local consumers. Samsung lacks correct self-cognition and positioning.As mentioned above, Samsung’s pr strategy for the Note7 issue did not consider the issue from the psychological level of Chinese consumers.Let’s give Samsung the benefit of the doubt at the time — it did a relatively rigorous battery test on the Note7 batch in China, unlike faulty Note7 products in other markets around the world.However, in the wake of the global Explosion of Note7, Samsung did not take into account the Chinese consumers’ desire to be treated with equal respect for their own safety, and instead spoke from the perspective of its own interests.After all, Samsung may have hoped to recoup some of the losses from recalls in other parts of the world by selling its cars in China.Samsung’s move is seen as discriminating between Chinese consumers and those in the US and Europe, making Samsung’s defection in the Chinese market the biggest in its history.In general, The rise of Samsung in the Chinese market to the final decline, is the process of its indigenization understanding.On the one hand, this is related to Samsung’s institutional structure in the Chinese market, because unlike Apple’s domestic localization of product function design, service, channels and marketing strategy, Samsung’s strategic power is controlled by the Korean top management in the Chinese market, and the localization of personnel and system cannot be achieved.Have the personage inside course of study points out, senior VP of samsung in China only two of them are Chinese (one of which is a Hong Kong), the others don’t even think about it into the top, the regional power in hand, the basic is also South Korea’s top executives, most of the airborne for regulators to understand the Chinese market, runs through substitution lead to China’s market strategy is a lack of continuity.At the product level, unlike apple in color marketing and product design (local tyrants gold, dark green, etc.) to the functional design (from the image features, processing power and battery life, double card double stay, etc.) are good at, thinking about Chinese consumer preferences, samsung mobile phone for a long time from the interface to the function does not conform to the Chinese consumer habits,Including insufficient software and hardware optimization resulting in fever, stuck once quite criticized.In addition, at the channel level, Samsung’s hierarchical mechanism is long, and the channel is difficult to sink. There are almost no agents in the third and fourth tier county-level markets, and no chain of common interests has been formed.For example, in the early stage, Samsung cooperated with gome, Suning, DXINtong, Leyu and other national chains and provincial retail chains. All marketing was carried out in accordance with the supply chain model of “channel agency, distribution and then retail stores”. The channel mechanism increased costs layer by layer, making every link unprofitable, and sales decreased year by year.Sources have previously talked about: Samsung China suffers from huge indicators, which distorts the market action and imposes a large amount of goods on dealers. Samsung frequently adjusts prices, which seriously harms the interests of dealers.From the country to retailers, there is no profit, naturally scattered, and compared with domestic OPPO, honor and other manufacturers, a key to sell well, is the firm binding of channel business.Apple has done the same — unlike in the US, Apple’s diversified retail channels in China include premium Apple resellers, home appliance chains and authorized resellers in third-tier cities and below.Unlike Samsung, where South Korean executives control the real power in the Chinese market, Apple uses local service managers to manage the local market, including setting up local RESEARCH and development centers and training local talents.German newspaper Die Welt pointed out in 2019 that Apple has set up four R&D centers and one data center in Beijing, Shanghai, Shenzhen and Suzhou in China, with more than 1,000 r&d technicians.In Germany, Apple doesn’t even have a research center.In general, Apple’s approach is worth learning from Samsung in terms of channel layout, product preference catering based on localization, and talent r&d localization.For now, there is a chance of a turnaround, given the absence of many years and the fact that Samsung may realize that the negative reputation of the Note7 series is wearing off and huawei’s share of the Chinese market is shrinking.Samsung also sees an opportunity in foldable phones.For the full year of 2021, Samsung’s foldable smartphone production rose nearly 300 percent to 8.1 million units, with December in particular producing 1.47 million units, up 3435 percent year on year, according to panel supply chain market research firm DSCC.One visible trend is that the price of Samsung’s foldable phones continues to fall, and Samsung needs incremental space in China in the global market as well.Despite a gap from its peak, Samsung still had 18,000 employees in China in 2020, and its net sales in China fell 12.5 percent for the year, though they still stood at $31.9 billion, according to the data.For Samsung, the folding screen, as a brand new category, is also an opportunity to rebuild its brand and reputation.Based on the far-reaching impact of the Note7 incident, it is still quite difficult for Samsung to regain the hearts and praises of the Chinese market from the aspects of brand, channel and product. In addition, Samsung’s brand influence in the Chinese market is far from that of the past.Times and hearts have changed, and It will be difficult for Samsung to regain its reputation and brand in the Chinese market.Overall, samsung to return to China, really need an attitude of humility, in all aspects of the change, including from services to marketing, from the channel to research and development to talented person’s comprehensive localization, it requires in-depth to understand the Chinese market and Chinese market of consumers, and learning style and strategy of apple, may be a samsung way back to China one of the most recent market.