Star MNC: From Smartphones to laptops, Samsung's strong India play

The Korean company has invested heavily in its 28-year journey in the country, which has helped capture consumers' attention

Korean consumer durables maker-Samsung entered India in 1995. The following year it set up a manufacturing facility in Noida, and opened its first R&D centre in Bengaluru. It is now the country’s largest consumer electronics company.

Samsung sells smartphones, televisions, tablets and laptops, smartwatches, monitors, audio devices, refrigerators, washing machines, microwaves, vacuum cleaners, and dishwashers through 200,000 retailers across the country.

In FY22, its total income was Rs 86,051 crore, compared with Rs 75,844 crore in the preceding financial year — a growth of 13.5 per cent, according to Capitaline. Net profit was Rs 3,845 crore, translating into a net profit margin of 4.7 per cent.

A report by Statista, a provider of market and consumer data, says that around 70 per cent of Samsung’s revenue in India comes from smartphones, and the company is leading in segments such as smartphones, televisions and refrigerators.

The electronics major now has two manufacturing facilities, five R&D centres and one design centre in India. Its R&D centre in Bengaluru is its biggest outside Korea. It invested Rs 4,915 crore in 2018 to set up the world’s largest mobile factory in Noida, and opened the world’s largest mobile experience centre in Bengaluru. It also invested Rs 1,588 crore to set up a new compressor manufacturing plant in Sriperumbudur in 2022.

These are some of the attributes that led the BS Jury to select Samsung as the Star MNC of the Year. This was the first time the jury selected an unlisted company in the MNC category, recognising its vast contribution to FDI in India.

The year 2022 was a strong one for Samsung across its product portfolio. In consumer electronics, the company saw the premiumisation trend (which began with the Covid-19 pandemic) gain traction in 2022. Consumers upgraded to larger screens and demand for television sets of 55 inches and beyond went up as families spent more time together, and began watching content on OTT platforms.  

Apart from the metros, consumers in Tier-II, -III and rural areas are also picking up smart TVs, apart from smart convertible refrigerators and hygiene steam washing machines, which bodes well for Samsung.

“Being the market leader in televisions globally for the last 17 years, Samsung’s premium TVs were one of the biggest growth drivers this year. The sales of Samsung’s flagship Neo QLED TVs, UHD TVs, and soundbars saw strong growth during the year,” the company said of the 2022 festival season.

Premium digital appliances, such as front-load washing machines and side-by-side refrigerators, were in especially high demand, it added. Demand was also strong because the 2022 festive season was a normal one after two pandemic years. 

“Millions of our consumers, partners and employees have loved Samsung over the years to make us the country’s biggest brand of smartphones and consumer electronics. Our vision of ‘Powering Digital India’ is aligned to the government and we want to set the course for India’s future growth and continue to be its strongest partner,” said J B Park, president and CEO, Samsung Southwest Asia.

Samsung India’s smartphone sales (by value) grew over 20 per cent year-on-year in 2022, outpacing the single-digit growth of the smartphone industry. This helped Samsung up its market share by value to 22 per cent last year.

In 2022, its 5G smartphone sales more than doubled over 2021. In contrast, 5G smartphone sales for the industry grew by 78 per cent. Samsung also outpaced the industry growth in the premium segment (over Rs 30,000), growing 75 per cent in 2022.

Samsung’s industry-leading growth in the premium segment helped the company increase its market share in this segment to 25 per cent in 2022, it said. The company expects 2023 to be an even better year for the smartphone industry.

According to its internal estimates, Samsung expects to grow in double digits, compared with single-digit growth for the industry. It expects double-digit growth in its consumer electronics business, too.

“Samsung is committed to help realise the vision of nation building, digital inclusion, digital empowerment, and bridging the digital divide. We are driving this through multiple initiatives in local manufacturing and R&D that are aimed at creating jobs and developing innovations and technology leadership in areas such as AI, 5G, and Big Data that can transform people’s lives,” Park said.