As per a report in Economic Times, Samsung India’s mobile revenues have registered a growth of 27% for the financial year ending March 2017. During the year, Samsung India clocked a total revenue of INR 57,000 crore (~$8.9 billion) – an increase of 20% year-on-year.
Samsung India’s mobile revenues which account for 60% of the total revenue stood at around INR 34,000 crore (~$8.9 billion) – an increase of 27% year-on-year. The total revenue growth is marginally better than the 19% growth rate at INR 47,000 crore (~$8.9 billion) for the financial year ending March 2016.
Revenues up even as the competition increases
What makes the growth rate impressive is the fact that financial year ending March 2017 includes the turbulent period of Galaxy Note 7 which hurt Samsung financially.
The ET report mentions an estimated loss of revenue of up to INR 6,500 crore (~$1 billion) due to the Galaxy Note 7 debacle. The growth in revenues is attributed to local manufacturing, which helps Samsung save on taxes and duties, and expansion of retail presence, which helps Samsung fight the onslaught of online-only brands.
This news comes in the backdrop of Xiaomi’s explosive growth. In October, Counterpoint Research data showed that while Samsung maintained its lead in India in Q3 2017, Xiaomi was at a striking distance to take the top position from Samsung. Later in November, the Q3 2017 data from IDC showed that both Samsung and Xiaomi were tied at 23.5 percent market share each in the Indian smartphone market.
It is worth pointing out that the above revenue growth doesn’t include the last two quarters where Xiaomi has made huge gains in market share. Despite Xiaomi’s impressive growth, Samsung is confident of maintaining the revenue growth in the current financial year.
One factor which might go in Samsung’s favor is that the Indian smartphone market is still growing, and thus might offer enough opportunities for more than one company to grow. It is not necessary that the growth of Xiaomi must come at the expense of Samsung.
To put matters into perspective, during the same period, Xiaomi in India saw sales increase by 700% to INR 8,379.3 crore (~$1.3 billion). For the current financial year, Xiaomi expects to cross $2 billion in revenues which represents an increase of 53.8% in revenue. With Xiaomi making huge inroads into the Indian market, it remains to be seen if Samsung can retain the growth rate both in terms of sales and profits.
Any increase in revenue but loss of market share can also mean that Samsung is able to sell more of its expensive models compared to the mid-range or budget phones – a situation somewhat similar to Apple. It is worth mentioning here that Samsung's flagship phones might be slightly more expensive in India now as the duty on imported phones has been increased recently by the Indian Government.
