Seoul Korea - Samsung Electronics plans to reform its retail network and organization in China, the epicenter of its sluggish smartphone business.Under this plan, Samsung Electronics intends to reduce its supply to large retail networks, while increasing the share of in-house stores and online sales.
As China’s major home electronics retailers remain idle in promoting the sales of Samsung smartphones despite a portion of their marketing expenses being covered by Samsung, the company decided to reduce the share of its sales through the channel.
Unlike in Korea where telecom servicecompanies are responsible for the distribution of smartphones, the share of open market is high in China. Open market is a term that describes the environment in which users purchase mobile phone devices first from retailers or online and later open their phone accounts through telecom companies. The share of open market is estimated at about 70 percent in China’s mobile phone market.
China’s major home electronics retailers such as Dixintong and Suning established strong sales channels in China, thereby having enjoyed advantageous positions against foreign mobile phone makers.