Is The Era of Samsung Over In India? Revenues Reduce Drastically As Growth Hits 10-Year Low
As of 2014, Samsung had assets worth $529 billion, total equity worth $231 billion and little less than 5 lakh employees globally.
But it seems that the might of Samsung is losing its edge in India.
During 2014-15, Samsung India grew by just 3% to reach Rs 41,575 crore in gross revenues, compared to Rs 40,392 crore in 2013-14. This 3% of growth is quite embarrassing for a company like Samsung, as in the last 10 years Samsung had never experienced such low growth.
Ever since Samsung entered in India, it has been growing at a healthy 10-15% per year, and in the last couple of years, it even touched 40% at one time. But the drastic way its revenues have decreased has alarmed the top honchos at Samsung, and they sent HyunChil Hong as President of Samsung India last year to stem this slide.
Hong’s Drastic Measures
Hong has been sent with clear cut directives: cut the extra burden and make Samsung profitable as soon as possible.
In October this year, we had reported that Samsung is firing 5% of their employees in India, which roughly amounted to 1100 firings. Targeted were blue collared employees in mid-level managerial positions in manufacturing.
Hong was termed as the man behind this mass firing, as drastic measures are being undertaken to cut the losses at any cost.
One senior industry executive has said, “Hong is under pressure from headquarters to grow the business this year. While it has managed to hold onto the smartphone business this year, it has failed to cut much teeth in appliances”
Considering that Samsung’s 70% of revenues come from mobile phones, Hong has introduced several initiatives to boost this niche. Fortunately for Samsung, they are still #1 phone brand in India.
Several sub-Rs 10000 models have been recently launched; ecommerce sales have been pumped up and have been decided to take on Apple in the premium section of mobile phones with new launches. But their appliances division is still bleeding, as LG is giving them a good fight.
Samsung has jumped into the ‘Make in India’ campaign for kick starting more manufacturing related activities but still they couldn’t stop Micromax from overtaking them last year; and the lead has increased this year as well. In March this year, they even lost the top slot position to Apple.
We may expect some more drastic measures from Samsung in coming days, as pressure is mounting on the company to reflect some concrete growth in India.
Why do you think Samsung is losing the fight in India? High prices of their smartphones? Low hardware capability of their appliances? Or bad marketing as a brand? Do share your opinions by commenting right here.