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‘Competition may harm phone sales’

‘Competition may harm phone sales’

9 Gwihan Lee

Since 2010, Gwihan Lee has been in Cambodia to boost the brand positioning of Samsung. The director of Thai Samsung Electronics’ office in Phnom Penh spoke to the Post’s Low Wei Xiang about developments in the industry and how they are affected by trends in other sectors.

What does Thai Samsung Electronics (TSE) do in Cambodia?

TSE is a subsidiary of the Samsung Group, operating as one of Samsung’s production bases for exports. In 2010, TSE opened a representative office in Cambodia because of its potential as an emerging market.

Before we entered Cambodia, there was no marketing support [in terms of paying for advertisements, for example] for our local retailers. Now, our retailers – we have 10 partners – receive such support from TSE’s Cambodian office to boost the sales of Samsung products.

Which are your most popular products?

For mobile phones, we are number one in Cambodia. According to a GfK industry report earlier this year, we have a 35.8 per cent market share for phones in general, and 40.5 per cent for smartphones. Now the Samsung Galaxy S4 and Note 2 are the most popular handsets in the Cambodian market. For TVs with panel screens, such as LCD, LED or PDP, we are also number one, with a 43.7 per cent market share in Cambodia.

Our biggest competitors in the mobile segment are Nokia and Apple, while in the TV segment, they are Sony and LG.

We still need to improve our sales in home appliances, such as refrigerators, washing machines and air-conditioners. We entered Cambodia later than other competitors, and have limited resources, so we had to focus on specific items like TVs and mobile phones. This year we will invest more into marketing our home appliance products.

Which industry sector will see the fastest growth in Cambodia in the next few years?

The mobile phone segment. Last year this segment grew 76 per cent in sales from the previous year. While mobile concentration here is high, those in the provinces still use basic feature phones, and when they move on to smartphones, new demand will be created. Also, some will also own several phones because they have multiple SIM cards, a unique feature in Cambodia that will further increase demand.

However, there are too many telecommunications operators in Cambodia, so investments into improving the quality of voice calls, for example, will not be large, since with such high competition, they may not get the right returns. This might negatively affect phone sales.

Some customers use microfinance loans to pay for electronic products in instalments. What do you make of this trend?

When people in other countries buy high-value products, they use credit cards. But this culture is not strong in Cambodia because people are not familiar with credit cards, so they use cash as payment now.
However, even if our customers’ income is too low, they will have some difficulty buying our products even with these loans. So customers who rely on borrowing continue to be those from middle- or upper middle-income groups.
But they only make up a very small portion of our customers, although numbers may increase because the electronic microfinance schemes have only recently started.

Will manufacturing of electronic products in Cambodia take off, and does your company plan an assembly plant here?

There is currently no electronics assembly plant yet in Cambodia. While Cambodia can perhaps manufacture small items, it is not ready yet for major consumer electronics products.

For Samsung, most of the consumer electronic products here are imported from factories in Thailand, while mobile phones come from Vietnam. We have 37 factories around the world, and in deciding whether to establish one, we consider the country’s local demand, export logistics, as well as local infrastructure, like whether there are sufficient part partners, since we do not make all the parts by ourselves.

We have studied about possibly investing in a factory in Cambodia, but have decided not to do so yet.

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