Samsung@25: How Samsung is powering Digital IndiaDecember 21, 2020
In the mid-1990s, just a few years after India liberalised its economy and embarked on an era of globalisation, a few Korean companies made their debut here. Daewoo, Hyundai, Samsung and LG Electronics set up shop in India. The India growth story had just started and consumer electronics and auto industries were expected to boom, thanks to rising disposable incomes.
So when Samsung celebrated its 25th anniversary in India this month, it wasn’t just about remembering those early days, but also about how some brands successfully navigated the challenges in the Indian market. Samsung today is one of the largest consumer facing companies in India, and the number one smartphone and TV brand.
When Samsung came to India, it was a little known brand. But so strongly did Samsung’s management believe in the India growth story that it not only decided to set up a manufacturing unit in Noida, it had the vision to set up R&D units in Bengaluru way back in 1996. The Indian economy was at $360 billion in 1995. In 2019, it became the world’s fifth largest economy at $2.94 trillion, surpassing the UK and France. According to RoC data, Samsung’s revenues grew from $6 million in 1996 to $10 billion in 2019. This is outstanding growth, and a shining example of an MNC doing all the right things to win over Indian consumers .
“When Samsung entered India, very few Indians knew about it. It was an underdog. But in 25 years, it has become a brand that is known in every part of the country, riding on the back of its strong innovations and understanding of consumers,” says Prabhu Ram, head – Industry Intelligence Group, CyberMedia Research. “Almost every home has a Samsung product today.”
A key facet of Samsung’s success is its consumer centricity, explains Dipesh Shah, managing director, Samsung R&D Institute, Bengaluru, which is also completing 25 years in the country early in 2021. “As part of our DNA, we are always listening to consumers. In fact that is a central part of our R&D philosophy, which has meant we have listened to consumers in India over the years and have innovated for the Indian market. And consumers have loved us for it,” he says.
Samsung has worked on several India-centric innovations across smartphones, televisions, refrigerators and microwave ovens. These include the recently launched privacy solution for smartphones AltZLife, the Curd Maestro refrigerator, Masala & Sundry Microwave Oven, among others. “We have been extremely bullish on R&D in India and this focus on R&D has helped us cement our number one position in the Indian market. The three R&D centres in India work on several cutting edge technologies such as AI, IoT, machine learning, cameras and cloud and apart from working on innovations that are centred on the needs of Indian consumers, they are contributing to innovations for global products,” says Shah.
Today Samsung has the largest retail and distribution network in the country with 200,000 retail partners. This includes the world’s largest mobile experience centre at the iconic Opera House in Bengaluru launched in 2018.
While this large offline retail business has helped it grow to what it is today, Samsung has started making inroads into the online business. In the smartphone space, Samsung expects to double its online business marketshare by the end of 2020, and clock 100% year-on-year growth in the second half of 2020.
“Business, post unlock, has been rapid and resurgent and that’s an ode to the fact that mobile phones are a huge part of consumers’ lives and there was a pent-up demand,” says Asim Warsi, senior vice president, Samsung India.Warsi says that by the end of 2020, Samsung’s Galaxy M series would be in excess of $3.5 billion in consumer facing merchandise value.
Customers have also come to love Samsung’s consumer electronics products, making Samsung the No. 1 brand for televisions, refrigerators and microwave ovens. This has been on the back of innovative lifestyle products that Samsung has launched over the years, including the 8K QLED TVs, The Frame, The Serif, Family Hub refrigerators. The factory in Noida that was set up in 1996 began making mobile phones in 2007. In 2018, Samsung launched the world’s largest mobile factory, which was inaugurated by Prime Minister Narendra Modi.
Ken Kang, president & CEO, Samsung Southwest Asia, says that at 25, Samsung India is as young and vibrant as ‘New India’. “Millions of our consumers, our partners and employees have loved Samsung over the years to make us the country’s biggest, most trusted and most admired brand of mobile phones and consumer electronics, with almost every home in India having a touch of Samsung. Our new vision #PoweringDigitalIndia sets the course for India’s future growth, in which Samsung will continue to be its strongest partner.”
Under this new vision, Samsung will launch a youth-centric citizenship programme involving engineering students and academia to create a stronger innovation ecosystem. In addition, Samsung has unveiled a refreshed strategy for R&D. Samsung’s R&D centres in India will continue to work on areas such as 5G, AI, IoT as well as on cloud services and embrace end-to-end thinking to take projects from research to development to the commercialisation stage. It will also expand Open Innovation with startups, students and universities.