Samsung Electronics Co. Ltd. is on the verge of reaching the ₹1 lakh crore annual revenue milestone in India, about 27 years after the South Korean consumer electronics and appliances company started operations in the country.
Samsung India Electronics has recorded total income of ₹98,924 crore in 2022-23, showed the company’s recent regulatory filings to the Registrar of Companies (RoC). Samsung India Electronics’ sales are 65% more than Hindustan Unilever Ltd (HUL) and 35% more than ITC Ltd’s FY23 sales.
Samsung India’s sales grew by 16% in FY23 compared to the year before, but net profit fell to Rs 3,452 crore from Rs 3,844 crore in 2021-22. This is when demand for smartphones, televisions and household appliances nosedived since the second half of last fiscal due to macroeconomic headwinds.
The company did not give reasons for its FY23 earnings performance in the RoC filings. An email sent to Samsung India did not elicit any response till press time on Thursday.
This is the second consecutive decline in annual profit for Samsung India.
Samsung’s mobile phone business, the largest in India, raked in revenue of Rs 70,292 crore in FY23, surpassing the standalone revenues of ITC (Rs 70,251 crore) and HUL’s (Rs 59,144 crore).
Samsung India’s mobile phone sales rose by 27% in FY23, which industry executives attributed to higher share and success of the ultra-premium Galaxy Z series of flip and fold phones, the premium S series phones and maintaining its share in the mid-segment – industry segments which posted growth last fiscal.
Tarun Pathak, research director at market tracker Counterpoint Research, said Samsung strengthened its premium play in smartphones across price points with the Flip, Fold and S series models, driving up the average selling price in India by 15%. Its smartphone sales also grew last fiscal despite a decline in the overall market.
“The company has also launched its own financing scheme which has made rapid inroads helping to upsell to the customers. Last fiscal, Samsung also wrested back the market leadership from Xiaomi,” said Pathak.
The mobile business now accounts for 71% of Samsung’s total sales in India, up from 67% in FY22. The company’s second largest business in India is home appliances where it logged sales of Rs 11,844 crore in FY23, growing 18% from the previous year.
“There has been a recent 30% jump in capital expenditure at Samsung India, accompanied by a substantial increase in workforce investment, which underscores the company’s strong commitment to the long-term prospects in India,” said Mohit Yadav, founder at business intelligence firm AltInfo.
Samsung, in its RoC filings, said it has grown from “a one-room, two-employee startup to the country’s biggest” consumer brand. The company last year announced an investment of Rs 1,588 crore to set up a new compressor manufacturing plant near Chennai to expand the component ecosystem in the country.
Samsung leads the smartphone market in India with 18% share in the June quarter, followed by Vivo at 17%, Xiaomi at 15%, Realme at 12% and Oppo at 11%, as per the latest report by Counterpoint Research. The researcher said in smart televisions, Samsung is at the second spot with 9.6% share trailing Xiaomi’s 9.8% share in January-June period of this year.
Samsung’s achievement of reaching the cusp of ₹1 lakh crore annual revenue in India is a significant milestone for the company and the Indian consumer electronics industry. It is a testament to Samsung’s long-term commitment to the Indian market, its focus on innovation, and its ability to cater to the evolving needs of Indian consumers.
Samsung’s success is also good news for the Indian economy. It creates jobs, generates tax revenue, and boosts investment. It also helps to reduce India’s dependence on imports of consumer electronics products.
Samsung’s entry into the ₹1 lakh crore annual revenue club is a watershed moment for the Indian consumer electronics industry. It is a validation of the country’s growing importance as a global manufacturing and consumption hub. It is also a signal to other global companies that India is a market with immense potential and opportunity.
Samsung’s success in India is also a testament to the country’s growing middle class and its rising disposable incomes. Indian consumers are increasingly demanding high-quality products and services, and Samsung has been able to cater to this demand with its innovative products and aggressive marketing strategies.
Samsung’s investment in India is also good news for the country’s manufacturing sector. The company has set up several manufacturing plants in India, which has created jobs and boosted the local economy. Samsung is also working with Indian suppliers and partners to develop the component ecosystem in the country.
As Samsung enters the ₹1 lakh crore club, it is well-positioned to continue its growth trajectory in the Indian market. The company has a strong brand presence, a wide range of products, and a deep understanding of the Indian consumer. Samsung is also committed to investing in India and developing the local manufacturing ecosystem.
Samsung’s success in India is a win-win for both the company and the country. It is a story of innovation, growth, and opportunity. It is also a story of how Samsung and India have partnered together to create a mutually beneficial relationship.
Specific ways in which Samsung’s success in India is helping to boost the Indian economy:
- Creating jobs:Samsung employs over 70,000 people directly in India, and its suppliers employ millions more. Samsung’s investment in India has helped to create jobs in a variety of sectors, including manufacturing, retail, and customer service.
- Generating tax revenue:Samsung is one of the largest taxpayers in India. The company’s tax contributions help to fund the government’s social and development programs.
- Boosting investment:Samsung has invested over ₹50,000 crore in India. This investment has helped to attract other foreign companies to India and has boosted the country’s economic growth.
- Reducing imports:Samsung’s manufacturing plants in India produce a wide range of consumer electronics products, including smartphones, televisions, and refrigerators. This has helped to reduce India’s dependence on imports of these products.