Samsung and Hyundai cut prices in China to recover market share

Aug 10, 2015, 08:00 am

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Samsung Electronics has cut down its smartphones prices in order to recover its market share. The picture shows a store in Zhongguancun, Beijing./ Source from Samsung China Headquarters

By Hong Soon-do, Beijing correspondent, AsiaToday - Samsung Electronics and Hyundai-Kia Motors, Korea's two major companies, have cut down their flagship products prices in the world's biggest market, China, in order to take back their market shares. Their strategy, which is aimed to actively respond to low-priced Chinese makers and global competitors, has shown a significant effect already in some of stores.

First, Samsung Electronics has cut down the prices of the Galaxy S6 and Galaxy S6 Edge by 800 yuan (US$129 or KRW 150,000) on average each. Since it announced the markdown on August 5, the Korean smartphone giant has been attracting customers to the stores nationwide. A Samsung Electronics store in Walmart Wangjing Branch in Chaoyang District, Beijing, is one of the stores showing tangible results. On August 8, the store was more crowded than ever. Deng Yun, who works at the store, was optimistic about the situation, stating, "It's not due to its smartphone quality problems that Samsung has been struggling with. It's because its products prices were more than twice as expensive as local cheap companies'. But now the prices have been adjusted, it is likely to recover its market share of around 10 percent." Su Ling, a customer who visited the store, said, "Cutting down the prices by 800 yuan is a very good news for young people like us. Many of my friends were rejoiced to hear the news. I will change my phone by taking the opportunity."

The mood is not much different in other ICT blocks in China, including Zhongguancun. Samsung Electronics stores are attracting more customers than before, showing the effect of price reduction.

Hyundai-Kia Motors has recently cut down the prices of its SUV models in China. Its old Sportage SUV models as well as Santa Fe and Tucson are lowered by up to 50,000 yuan, 30,000 yuan, and 20,000 yuan, respectively. A store in Xingshikou Road of Haidian District in Beijing is one of the examples showing these models are being extremely popular in China. More potential buyers than usual are visiting the store. Li Ting, a potential buyer in his mid thirties who wanted to purchase a Tucsan, said, "I think lowering the price by 20,000 yuan is very reasonable. The quality is good, so I want to purchase this time."

Samsung Electronics and Hyundai-Kia Motors' current foreign rivals have cut prices. Perhaps, the price reduction was an unavoidable choice for the Korean manufacturers. But the results are not bad so far. It is highly likely that they will recover their market share of 10 percent soon, and even conquer the market for the first time.  

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