Samsung Electronics Exits Chinese Television and Home Appliance Retail Market to Pursue Business Restructuring and High Margin Industrial Growth Operations
Samsung Electronics stops selling their televisions and home appliances in the Chinese market. The company notified employees about the retail business shutdown for these product categories during a company meeting which took place on 6 August according to an etnews report. The company will stop selling home electronics to Chinese customers while continuing to produce goods at the Suzhou production plant for other international markets.
The company will implement this strategy change because of competitive market conditions which decreased its profits. Local manufacturers who produce televisions at TCL and Hisense have established themselves as market leaders through their low priced mid range television products and now they intend to capture the high end television market. The appliance market has experienced brand growth through Haier and Midea as they use their extensive domestic distribution systems and inexpensive production methods to gain market share. The increase in logistics expenses together with rising raw material costs has made it harder for Samsung to sustain its profitable retail operations.
The company will now focus its efforts on Business Restructuring and Outsourcing activities. Samsung plans to achieve improved operational efficiency by outsourcing its entire low value appliance production process. The company will close its home appliance factory in Malaysia as part of its global realignment process which includes several operational changes. The company intends to achieve maximum profitability through its focus on high margin fields and high technology research activities instead of competing in price sensitive markets for retail volume.
The company will continue its mobile devices and semiconductors business operations in the country. The mobile division wants to increase its market share through two main product lines which include the luxury W series foldables and the AI enabled Galaxy series designed specifically for local users. The company will keep investing in semiconductor and medical device operations because these high technology fields are essential to its future industrial development in the area.
The brand maintains its commitment to support its customers. Existing owners of Samsung appliances will receive ongoing technical support according to statements made by Samsung representatives. The company will provide free maintenance and paid maintenance services according to local consumer protection rules and the current condition of the hardware. The company will focus its future operations on establishing manufacturing partnerships who will conduct advanced industrial investments instead of selling directly to consumers.
