Samsung to Close Shop in China as Market Slumps to 1 Percent

By Korir Isaac / December 13, 2018




Samsung Electronics is set to cease the manufacture of mobile phones in one of its plants in China due to high competition from affordable local rivals like Huawei.

The company, which is one of the leading smartphone manufacturers in the world, will stop operations in its Tianjin manufacturing plant due to loss making.

According to data from the research firm Counterpoint, during the financials of the first quarter of 2018, Samsung’s market share has significantly dropped to 1 percent, which is a long way from the 15 percent recorded five years ago.

The South Korean company has admittedly lost to home-grown brands like Huawei, which is fast claiming the lion’s share of the market.

In a statement, Samsung affirmed the move claiming that it is one of the efforts the company is undertaking to enhance efficiency in productions.

“As part of ongoing efforts to enhance efficiency in our production facilities, Samsung Electronics has arrived at the difficult decision to cease operations of Tianjin Samsung Electronics Telecommunication,” Samsung said.

Nevertheless, the company says that the Huizhou manufacturing plant in the southern province of Guangdong, China will remain operational.

The Tianjin plant manufactures 36 million phones annually while the Huizhou plant produces 72 million units. In Vietnam, where the company has a focus on, the company has two factories that cumulatively make 240 million mobile phones a year.

The closing of the manufacturing plant will see about 2,600 employees go home by the end of 2018. However, the company has promised to offer compensation packages to the employees and possible transfers to other Samsung facilities.

“Samsung doesn’t need to stay in China because of rising labor cost and its almost non-existent Chinese market share. They can be better off in India and Vietnam,” said Greg Roh, a senior analyst at Hyundai Motor Securities.

Samsung in a statement also noted that China remains an important market for the brand and is actively participating in China’s economic policies by fostering growth in the components industry.



About Korir Isaac

A creative, tenacious, and passionate journalist with impeccable ethics and a nose for anticipated and spontaneous news. He may not say it, but he sure can make one hell of a story.

View other posts by Korir Isaac


More Articles From This Author








Other Related Articles










SOKO DIRECTORY & FINANCIAL GUIDE

ARCHIVES

2019
  • January 2019 (256)
  • February 2019 (140)
  • 2018
  • January 2018 (291)
  • February 2018 (220)
  • March 2018 (279)
  • April 2018 (226)
  • May 2018 (240)
  • June 2018 (178)
  • July 2018 (257)
  • August 2018 (250)
  • September 2018 (256)
  • October 2018 (287)
  • November 2018 (286)
  • December 2018 (187)
  • 2017
  • January 2017 (183)
  • February 2017 (195)
  • March 2017 (207)
  • April 2017 (104)
  • May 2017 (169)
  • June 2017 (206)
  • July 2017 (190)
  • August 2017 (196)
  • September 2017 (186)
  • October 2017 (235)
  • November 2017 (253)
  • December 2017 (266)
  • 2016
  • January 2016 (167)
  • February 2016 (165)
  • March 2016 (190)
  • April 2016 (143)
  • May 2016 (246)
  • June 2016 (183)
  • July 2016 (271)
  • August 2016 (250)
  • September 2016 (234)
  • October 2016 (191)
  • November 2016 (243)
  • December 2016 (153)
  • 2015
  • January 2015 (1)
  • February 2015 (4)
  • March 2015 (166)
  • April 2015 (109)
  • May 2015 (117)
  • June 2015 (121)
  • July 2015 (150)
  • August 2015 (157)
  • September 2015 (189)
  • October 2015 (171)
  • November 2015 (174)
  • December 2015 (208)
  • 2014
  • March 2014 (2)
  • 2013
  • March 2013 (10)
  • June 2013 (1)
  • 2012
  • March 2012 (7)
  • April 2012 (15)
  • May 2012 (1)
  • July 2012 (1)
  • August 2012 (4)
  • October 2012 (2)
  • November 2012 (2)
  • December 2012 (1)
  • 2011
    2010
    2009
    2008
    2007
    2006
    2005
    2004
    2003
    2002
    2001
    2000
    1999
    1998
    1997
    1996
    1995
    1994
    1993
    1992
    1991
    1990
    1989
    1988
    1987
    1986
    1985
    1984
    1983
    1982
    1981
    1980
    1979
    1978
    1977
    1976
    1975
    1974
    1973
    1972
    1971
    1970
    1969
    1968
    1967
    1966
    1965
    1964
    1963
    1962
    1961
    1960
    1959
    1958
    1957
    1956
    1955
    1954
    1953
    1952
    1951
    1950