Samsung and India: Why the South Korean tech giant considers India as more than a market

THE YEAR 1995 was all about choices in India. You could choose to buy cosmetics from Revlon, the Cielo sedan from Daewoo, or televisions from Sony or Akai. These were the fruits of liberalisation, with foreign brands flocking to India. It was also the year that Samsung chose to quietly enter India, setting up its first office in Delhi with just two employees. The mission: manufacture colour TVs.

In the mid-1990s, the South Korean giant, too, had to make choices as it sought to establish a foothold in the US and Europe. The search was on for a philosophy needed to build a brand. “The upcoming 21st century marks the Age of Culture, an era in which intellectual assets will determine a company’s worth. No longer is a company selling products. Instead, it has to sell its philosophy and culture,” then Samsung chairman Lee Kun-hee, said in his New Year’s address in 1996, writes Geoffrey Cain in his book Samsung Rising. The chairman declared 1996 the Year of the Design Revolution, signalling a shift towards connecting every device through design, software, content, and user experience.

The same year, Samsung decided to take an early bet on India, establishing not just its first manufacturing facility in Noida, but also its first R&D centre in Bengaluru (then called Bangalore).

Fast forward to now, and India is not just a market for Samsung but a key supplier to its growing global demand. From a modest start, Samsung India Electronics Ltd (SIEL) has grown to achieve a revenue of ₹1,01,589 crore in FY24. “Over the decades, India has not just been a market for us — it has been a partner in innovation, a hub of manufacturing, and a centre for research and development. And we will continue to invest in India,” says J.B. Park, president & CEO, Samsung Southwest Asia.

Today, for most decisions on AI, Samsung holds discussions between its Seoul headquarters and its entities in the US and India. Samsung R&D Institute India-Bangalore (SRI-B) has so far filed 7,500-plus patents across India and globally and is the largest outside Korea, with an estimated 5,000 employees. “The three R&D centres in Bengaluru, Noida, and Delhi, along with the Design Centre in Noida, represent Samsung’s commitment to developing and testing the cutting-edge technologies like AI, 5G, IoT, and human-centric design. These... serve as global hubs, contributing significantly to Samsung’s product ecosystem worldwide,” says Park.

The Smartphone Star

Though TVs and consumer durables have deep roots in Samsung’s journey, its most profitable business is the mobiles division. Samsung has weathered fierce competition to become a brand that is synonymous with innovation and reliability.

Samsung’s smartphone portfolio has evolved from its peak of 10 lines (or ‘series’) in the mid-2010s to just five now. From playing in volumes, Samsung’s smartphone strategy has shifted to value, says Tarun Pathak, research director at Counterpoint Research, given the scope of expanding in volumes has stabilised for the smartphone industry because the upgrade cycle of consumers has lengthened and purchases of second-hand smartphones are growing. “What Samsung has done (is that it has shifted) strategy from volume-based to value-based… starting 2024,” he says.

In the November quarter, Samsung’s market share in terms of volumes fell to 16%. Given the value-based strategy, that’s not a cause for concern. “Never rule out Samsung… It’s too big a brand,” says Navkendar Singh, AVP, IDC, which tracks the market.

Samsung has evolved from winning over consumers with strategic pricing and placement to leveraging its first-mover advantage. While Singh notes that GenAI capabilities aren’t a major driver for smartphone sales in India yet, its share is expected to grow rapidly, reaching 40% and surpassing half a billion shipments by 2027. By Q42024, one in 10 smartphones shipped in India were GenAI-capable, with Samsung’s Galaxy S24 series playing a significant role, says Singh.

“We will invest in building strong AI-led experience across consumer touchpoints. With the launch of the Galaxy S25 series, we have enabled more than 40,000 retailers with various skilling and training programmes… We have expanded Galaxy AI experience points to over 12,000-plus stores in India,” says Raju Pullan, senior VP, MX business, Samsung India.

Samsung’s strategy for the coming years focusses on optimising product placement and it plans to double its Experience Stores from 400 to 800 this year. “We look forward to building deeper connections with (retailers and customers) through our expansive retail network spanning Leh to Nagercoil… Further, the seamless integration of online and offline channels creates a cohesive omnichannel experience, allowing customers to enjoy a hassle-free journey from product discovery to final delivery,” says Sumit Walia, VP, D2C business, Samsung India. Incidentally, the Galaxy S25 line-up is set to be manufactured at its Noida facility, from where a significant share of smartphones are exported globally.

Building A Lifestyle Brand

While currently as much as 70% of the India business comes from smartphones, the mix is expected to change. “(That ratio) will partially change, because consumer electronics penetration in the Indian market is still (in a nascent stage)… maybe the portion of consumer electronics versus mobile will be 50:50 in the future. (And) I think it will come in within three years,” Park said on the sidelines of the year’s first Galaxy Unpacked event in San Jose, California.

The company is focussing on other areas, including innovations in its HomeAI space. “With the power to control devices in the home using a smartphone, SmartThings streamlines routines with personalised notifications and advanced automation features to make lives more convenient,” says Ghufran Alam, senior director, digital appliances, Samsung India. “Similarly, Bespoke AI uses AI, connectivity and sustainability to improve the user experience of its smart home appliances.” Mohan Rao Goli, MD and corporate VP, SRI-B, says these innovations include “Galaxy AI, Bespoke AI, and AI TV, designed to fulfil consumer expectations for smart, daily interactions with AI-powered real-time decision-making”.

At CES this year, Samsung positioned itself as an AI-driven lifestyle brand. This vision finds resonance in India. Take washing machines for instance. In October 2024, during the festive season, it launched 10 large-sized front-load AI washing machines. The company projects that by this year, 70% of its sales would come from Bespoke AI appliances.

This AI frenzy in the consumer durables space is in line with the growing consumer base for smart appliances in the sector. India’s smart appliance market is poised for significant growth, with penetration expected to more than double from 4% in 2023 to 10% in 2028, says Mohit Makhija, senior director, CRISIL Ratings.

Samsung holds double-digit market share across most consumer durables subcategories. The sector overall stood at ₹1.76 lakh crore in FY24, per EY. Of this, TVs accounted for 22%, followed by ACs (20%), refrigerators (14%), and washing machines (12%).

Coming to the AC segment, with surging demand, Samsung is focussing on launching more residential units in 2025. For refrigerators, the the focus is on larger-capacity models. And for good reason. “The refrigerator market is seeing a shift towards larger capacity models, driven by changes in consumer behaviour, such as stocking up on groceries over the weekends and increasing availability of frozen food options,” says Makhija.

As India’s demographic dividend fuels the next wave of consumption, Samsung seems poised to script its next chapter in the country.