Will Samsung Smartphones, No.1 for 15 Years, Lose Russian Market to China?

[Asia Economy Reporter Lim Hye-sun] Samsung Electronics is increasingly likely to lose its 15-year dominance in the Russian market to Chinese companies. Due to the aftermath of Russia's invasion of Ukraine, Western sanctions and boycotts have intensified, potentially prolonging the suspension of smartphone supplies. Taking advantage of this, Chinese smartphone companies such as Xiaomi and Oppo are seeking to gain indirect benefits.

According to Russia's largest mobile carrier Mobile TeleSystems (MTS) and others on the 13th, sales of Chinese smartphones such as Huawei, Oppo, and Vivo in the Russian market doubled compared to the previous month over the past month. During this period, Huawei's sales increased by 300%, while Oppo and Vivo each grew by 200%. Xiaomi grew by 12%. It is analyzed that Russian consumers chose Chinese smartphones as an alternative after Samsung Electronics stopped exporting to Russia and Apple also halted product sales. Although Samsung Electronics' remaining inventory is being sold in Russia, prices have more than doubled, leading to increased sales of relatively affordable Chinese smartphones.

Russia is the world's 6th largest smartphone market and the largest demand market in Europe. Unlike Apple, which has a relatively low market share, Russia is an indispensable market for Samsung Electronics. Since 2007, Samsung Electronics has never lost its number one market share position in Russia. According to Counterpoint Research, Samsung Electronics' market share in Russia last year was 33%, followed by Xiaomi (25%) and Apple (14%). However, due to a sharp decline in smartphone sales, maintaining the number one position this year seems difficult. After pre-orders, Samsung stopped exports during the main sales phase of its ambitious Galaxy S22 series, and the new Galaxy A53, a budget smartphone known as "Russia's national phone," was excluded from the first sales countries. This effectively means a suspension of operations. In particular, the suspension of Galaxy A series sales is expected to have a significant impact, as the Galaxy A series is known to account for half of Samsung Electronics' total sales. Samsung Electronics is closely monitoring the situation.

On the other hand, Chinese smartphone companies are actively targeting the market. The Chinese government has maintained a pro-Russian neutral stance, refusing to join US-led sanctions. These companies are focusing on "building performance" rather than "cautiousness." Xiaomi of China released the "Redmi Note 11," a rival to the Galaxy A series. It announced a discounted price from 26,990 rubles to 24,990 rubles. However, even if sales increase in Russia, it seems difficult for Chinese smartphone companies to improve their performance due to the unstable value of the ruble, which could worsen profitability. An industry insider predicted, "With increasing demand for mid- to low-priced smartphones in Russia, the market share of Chinese smartphones in Russia is expected to increase significantly this year."

This content was produced with the assistance of AI translation services.