Samsung exits mobile production in China, shifts plants to India and Vietnam

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Samsung Electronics Co Ltd has ended its mobile phone production in China, according to an official statement by the company. Reports say that the electronics giant has already shut down its last phone factory in China. Earlier, it had cut production at the plant located in the city of Huizhou in June. 

The tech giant’s ceased phone production in China follows other manufacturers shifting production from China due to rising labor costs & economic slowdown. The decision comes as the company moves towards markets like Vietnam and India for its smartphone manufacturing. 

Samsung had also recently lost its share in the Chinese market in light of rising competition from players like Huawei, Oppo, Xiaomi, and Vivo. The firm no longer stands among the top ten vendors in China. Amidst the rising competition, Samsung share shrank to 1% from around 15% in mid-2013. Samsung said that the decision to end production in China had been taken to boost efficiency.

 

Falling stakes & rising competition

According to another report, Samsung shifted production to Vietnam due to the rising labor costs in China. Around 200k people have been employed in Vietnam by Samsung’s phone production business. Nearly half of Samsung’s roughly 292 handsets are manufactured in the country. 

Samsung also had production units in India, the world’s second-largest market. It has plans to handle the premium handsets in South Korea, mid-range models in India, and a variety of units in Vietnam. 

The firm had high hopes for the Indian market but has failed there as well with competition from inexpensive brands like Xiaomi last year. The brand faced a similar situation in China. The struggle in the worlds two of the largest countries has disintegrated Samsung’s global standing. 

The company’s worldwide share shrank by 0.9% point to 20.8% last year, and its lead over Apple standing at No.2 narrowed to 5.9 points from 7 in 2017. The overall fall in handset shipment fell 8% by volume. 

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A passionate writer with bachelor’s in the field of English & Journalism. Other than being a bibliophile, some of her hobbies are travelling, photography and poetry.

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