Samsung clings to smartphone edge
Huawei and Oppo bring competition
South Korea's Samsung is struggling to hold onto market dominance in Thailand's 112-billion-baht smartphone market, facing stiff competition from Chinese competitors Huawei and Oppo, especially for high-end, 5G-capable and foldable phones.
Samsung's announcement of a high-end US$1,980 (61,903 baht) foldable smartphone was quickly matched by Huawei with a $2,600 foldable model.
According to data from Canalys, in the fourth quarter of 2018 Oppo was estimated as the market leader in Thailand as Samsung lost ground in the mid-range market. In the fourth quarter, Oppo had a market share of 22.2%, Samsung 21.1%, Huawei 13.1%, Vivo 12.7% and Apple 8.6%.
To stay competitive, Thai Samsung Electronics is using an "excitement marketing" strategy by offering "blind bookings" with gifts over 10,000 baht in value to attract existing users to upgrade to the Galaxy S10.
"Thailand remains a strategic market to maintain our status as market leader," said Wanna Swuddigul, vice-president and chief marketing officer of Thai Samsung Electronics. "We will fight to the end to hold on to our customers. As there are more choices in smartphone options, we will prioritise existing customers."
She insisted a third-party research firm, which she refused to name, reported Samsung remained the Thai market leader for smartphones in every quarter of 2018.
The company got the green light from its headquarters to offer blind bookings for the Galaxy S10 to loyal fans. It has received over 20,000 blind bookings so far.
Blind bookings are offered for customers to pre-order new products before they launch globally.
Pre-orders will run until March 4 and the product will be available on March 8. The Galaxy S10 starts at 26,900 baht, S10e at 31,900 baht and S10 Plus at 35,000 baht.
Globally, Samsung sold 2 billion units of Galaxy phones and will continue to launch innovative products priced reasonably to maintain brand loyalty, said Mrs Wanna.
Samsung's internal research found 70% of buyers are existing users and 30% switched from a rival brand. The top three reasons people bought a Samsung Galaxy S were brand credentials (70%), design and price (65%) and camera (55%).
She said local smartphone sales are expected to grow in the single digits in 2019, from 112 billion baht last year, with the fastest growing segment high-end, over the $600 price range. Thais replace their smartphones every 18 months on average.
Samsung's S10 targets "premium millennial users" who love to create content and focus on displays and video, including entertainment and gaming, said Mrs Wanna. The phone has five cameras and a new display.
She said by the second quarter of 2019, Samsung will launch its foldable smartphone in Thailand to target "modern luxury" users at the executive level and early adopters.
In other mid- to entry-level markets, Samsung plans to redefine segmentation to attract youngsters by investing in consumer behaviour analytics, said Mrs Wanna.
Juthamas Tangtatpongsathorn, an analyst at IDC Thailand, said in 2018 Samsung smartphone shipments fell to 700,000-800,000 units in the third and fourth quarter, from an average of 1.5-1.6 million units. Sales dropped for its 5,000-7,000 baht J-Series, while Oppo increased shipments during that time to 1 million units.
Samsung faces more competition from Oppo in mid-range, while Huawei beat the Galaxy S and Note 9 in the high-end market, said IDC. Overall in 2018, Samsung still was a market leader in Thailand.
Local smartphone value still accounts for 44.9% of the 452 billion baht in total IT spending thus far in 2019, compared with 43.5% of 424 billion in IT spending for the same period of 2018.
IDC disclosed 2018 market share for Thailand smartphones as Samsung at 21%, Oppo at 16%, Huawei at 14%, Vivo at 11% and Apple at 7%.