It is always difficult to report about companies which were once upon a time at their peak and are not there anymore. In this report, we are talking about Samsung who has had to suffer a similar fate in the Chinese markets. Once upon a time, it was seen that Samsung used to sell one in every five phones that were sold in China. This meant that the company had more than 20% of market share in the Chinese smartphone market which is huge. However, the likes of Xiaomi, Huawei and BBK Electronics have made a huge dent in Samsung’s market share. Finally, the company has accepted defeat and they have decided to cease operations in the Chinese market.
According to a statement, Samsung said that “As part of ongoing efforts to enhance efficiency in our production facility, Samsung Electronics has arrived at the difficult decision to cease operations of Samsung Electronics Huizhou,”. At the moment, we don’t know how many employees were working at this factory so we also don’t know how many of them are being laid-off. However, the fact that one of Samsung’s biggest facilities in China has to be closed down means that the company is really struggling in that particular market.
As a parting gift, Samsung offered a smartphone to each and every one of the workers that were in the factory from more than 10 years and this was revealed by a Weibo video. However, Samsung declined to comment on this matter so we don’t know if this information is true or not. According to Counterpoint Research, Samsung’s market share in China has reduced to just 1% for the last quarter which stood at 20% in 2013. Therefore, the decision to exit Chinese markets for Samsung makes sense as they can focus more on the other markets. Also, labour costs are one of the factors influencing Samsung’s decision to leave China.