NEW DELHI: Samsung India’s mobile phone business clocked a 27% increase in revenue to over Rs 34,000 crore ($5.3 billion) for the year ended March 2017 — the fastest rate in recent times —helped by local manufacturing and expansion of its retail channels. The company said it expects a similar pace of growth this financial year.
With mobile phones accounting for about 60% of the overall business, Samsung’s revenue from India for FY17 worked out to be about Rs 57,000 crore, a 20% increase and marginally ahead of the 19% growth of Rs 47,000 crore in 2015-16. The mobile business last year excluded the Note 7 model, which was withdrawn globally and not introduced in India.
“Had the Note 7 been there, the numbers could have been better… our Note users wait for the next model, which has resulted in high uptake of Note 8 when it came to the market,” said Asim Warsi, Samsung India’s senior vice-president for mobile business.
Samsung recalled its Note 7 devices globally in October 2016 due to cases of exploding batteries. In India, the model hadn’t been launched and analysts figure this may have shaved off up to Rs 6,500 crore from the company’s revenue.
Warsi said the pace of revenue growth in the current financial year will be similar to FY17, helped by the Galaxy S8 and Note 8 models, besides the popular J series of mid-range phones.
Samsung’s pace of expansion compares with Apple’s 17% increase to Rs 11,618 crore in the year ended March, its slowest growth in five years. Chinese rival Xiaomi’s revenue surged almost eight-fold, about 700%, to Rs 8,379.3 crore last year.
While Samsung is ahead in terms of revenue, it has been losing market share in smartphones to Chinese rivals.
The South Korean company’s 22.8% share at September end is a hair breadth ahead of Xiaomi’s 22.3%, according to Counterpoint Technology Market Research data. Samsung started 2017 with a 26% share compared with Xiaomi’s 13%. Vivo, Oppo and Lenovo have gained share as well. The top Chinese competitors together hold more than 54% of the market.
Warsi downplayed the competition, saying Samsung had a 46% share of the smartphone market by value and 60% in the premium segment, which is for devices priced above Rs 30,000.
“I wouldn’t comment on any specific competitor but I would reiterate that our approach to the Indian consumer and the market thereof has always been that of serving the market and consumer, not addressing specifically competition in that sense,” senior vice-president, Warsi said.
Tarun Pathak, a research associate at Counterpoint, noted that Xiaomi had taken off, especially after the July-September quarter of 2016.
“Samsung’s strength lies in its robust channel reach and they would want to focus on their strength and also work on channel strategies, including distribution margins and others, given the growing competition,” Tarun Pathak said.