Samsung Elec launches dedicated team for China

Samsung Electronics Co., South Korea’s top tech giant, has established a dedicated team for the Chinese market, where its smartphone and home appliances businesses have been struggling amid competition with mainland Chinese makers.

The team is under the immediate control of Samsung vice chairman and co-CEO Han Jong-hee, suggesting the head of the DX division, a combined unit of the company’s mobile and consumer electronics sectors, will handle the overall Chinese business in person, according to industry sources on Dec. 19.

The organization’s business unit consists of mobile communications, consumer electronics and the display and display divisions.

SHRINKING MARKET SHARE IN THE LARGEST MARKET

Samsung’s market share has been shrinking in China, the company’s largest market. Samsung generated about 30% of its total sales in China during the third quarter. Its sales in the US accounted for 29%, while Asia-Africa and Europe made up 16.4% and 12.6%, respectively.

On the other hand, Samsung’s market share in China has been declining. It is the world’s biggest smartphone maker with a 20% market share as of the third quarter. The company, however, accounted for 11% in the Asian smartphone market as its market share in China has fallen below 1% since 2019. Competition intensified against local makers such as Xiaomi, Oppo, Vivo and Realme, while more Chinese customers have shunned South Korean products due to the deployment of the Terminal High Altitude Area Defense (THAAD) system on the Korean Peninsula.

Jay Y. Lee, Samsung’s vice chairman and de facto leader of Samsung Group, may make a business trip to China in early January during the two-week winter break of the Seoul Central District Court, some industry sources speculated. Lee is currently on parole after spending several months in prison following a court ruling in January that sentenced him to two-and-a-half years in jail during a retrial of a bribery case involving former South Korean President Park Geun-hye.

“US containment of Chinese semiconductor industry put Samsung, which has production lines both in the US and China, in trouble,” said a source. “Vice Chairman Lee needs an opportunity to strengthen its position in the Chinese market and enhance relations with the Chinese government in person.”

Write to Sin-Young Park at nyusos@hankyung.com
Jongwoo Cheon edited this article.