Why comparing brands to their Chinese counterparts is comparing apples to oranges?

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Samsung is the top dog in android smartphones as of now but isn’t really great at anything low or mid-range. While most Chinese brands can provide high-end low-cost phones to the Indian market why can’t Samsung? We take a look.

S1 to S7

First off, Samsung has a huge network of sales and marketing channel, which increases its cost, while the new Chinese giants rely heavily on the online-only model for the sale of their phones. Samsung, on the other hand, has a strong hold of offline as well as online retail, it also has its own corporate branded stores, which it owns and manages which increase the cost again.

Then comes the point of service and while these Chinese brands service, centers might be hard to find they are even harder to deal with. The phones are kept with them for a long time only to get them repaired while in the case of bigger brands, the part is outright replaced and the device is handed off to the customer in a very short span of time. Bigger brands keep an inventory of spare parts at their service stations while smaller Chinese brands have a centralized distribution of parts, which increases time consumed in getting the phone back to working condition again.

A3

The core difference between bigger brands and their Chinese counterparts lies in their go to market strategy, while Chinese products are almost exclusively sold through one channel like e-commerce bigger brands go for a different, more guerilla path of bringing a product to market with huge advertising and marketing budgets and a strong offline presence along with an online one. This not only increases the cost but also creates awareness about the brand.

While the Chinese phones are extremely powerful and good they aren’t in any way revolutionary, all the new innovations are done by bigger brands with even bigger R&D departments which later on trickle down to the Chinese brands and their products. This, although isn’t necessarily a bad thing decreases the costs for the smaller brands while increasing it for bigger brands like Samsung and LG.

A2

Most of these Chinese phones are sold via flash sales where a limited quantity goes on sale once a week thus creating a buzz around it all week long while bigger brands have readily available stock on their hands to be dispatched at command. This increases the production inventory and warehousing costs for bigger brands.

Bigger brands offer standard accessories in the box when the phone is purchased but the newer Chinese brands are resorting to new measures of cost-cutting by excluding the standard accessories from the box and instead selling them as standalone products which increase their profits. Xiaomi apart from selling phones now sells USB fans, lights, fitness bands phone covers etc, and this cannot be expected from bigger brands. One will not expect to buy a note 7 for 350$ and then buy T-shirts and shoes from Samsung for them to make a profit.

The last point to be considered is the quality of the product and while it may not be bad it isn’t anything remarkable either, these phones comparatively last less than a branded counterpart and tend to suffer from problems sooner than their branded counterparts.

Here are some of the major reasons why bigger brands like Samsung and LG or HTC can’t provide octa-core chipsets with 3 GB of ram and decent cameras at under 250$ while companies like Moto, Xiaomi and LeEco can.

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