Samsung Electronics, a subsidiary of the company is facing drop in sales this year. Its latest flagship smartphone failed to reach the expected profit margin which made the company analysts to re-think over the sales and marketing strategy. On the contrary, sales in Indian subsidiary have increased to 1% this year.
India is over-populated progressive country where the demand for global smart phones are increasing with time. Recently, it has emerged as one of the biggest market for smart phone companies. Samsung is expecting to see an increase in earnings once the plant expansion plans are completed. According to sales report issued on March 3, 2018 Samsung India Electronics recorded sales of KRW 8672 billion and net profit of KRW 359 billion in third quarter of this year. Sales profit margin were 1.7 percent more than the same last year period.
India’s smartphone market is expanding with double digit growth, following a 14 percent growth rate last year. Indian smart phone shipment reached 42.6 million in the third quarter, which made it second largest smartphone market after China. Samsung Electronics successfully kept up with the increased market demand while competing the other rivals in the industry.
Samsung completed its new smartphone factory in July 2006 in a remote area of Noida last year. The company is expected to have increased profit margin from next year after it has invested in a new plant expansion in mid-year. Lee Jae-yong vice chairman of Samsung Electronics attended the inauguration ceremony of the new factory. The company is expected to increase the production capacity of its factory from 68 million units per year to 120 million units by 2020. This production level will be more than the productions in the largest Galaxy plant in Vietnam.
Currently Indian economy is facing some instability which can be improved by external investments from companies like Samsung. The tech giant sees a promising future of smartphone in the Indian market and expecting to bring large scale investment which will not only reduce the cost of smartphone manufacturing process but will also can bring various cost saving benefits to the government.