Samsung Electronics is relying on facilitating installment and post-sales services in order to keep its leading position in the mobile market. According to Sherif Barakat, vice president and chief commercial officer of Samsung Electronics, the company is negotiating with some personal finance companies, such as Aman, in order to facilitate the installment procedures to overcome the problem of increasing prices that customers face.
Competition has been vicious in the local market during the past period; how will you maintain your position in the market?
Competition is healthy for the market and gives companies an incentive to develop their products, helping launch the most developed products and technology in the Egyptian market, and this is something that Samsung plans to do, especially as the market recovers.
According to the report issued by GfK, the market sold 1.7 million smart and traditional phones in September, after sales reached 1.1 million in February.
The sales value of the market reached EGP 3bn in September, which implies that the market is at least partly recovering.
According to statistics, smartphones represent 70% of the market’s sales, and the remaining percentage is from traditional phones. In terms of the financial value of the market’s sales, smart phones bring in 95% of the mobile phone revenues, while the share of traditional phones reached 5%.
The mobile market is recovering, which implies that competition increases sales. Our market share reached 43.4% in September, compared to 41.5% in August, especially since development in technology made consumers change their phones, which helps increase our market sales.
In terms of maintaining our position in the market, post-sale services have become an important factor for our customers, especially with the increase in device prices. This greatly affects the purchasing decision of customers in terms of choosing their brand, so we are working to expand these services and we have recently launched our first services for consumers with special needs.
In addition, we have a network of 55 branches across the country, and we also have mobile post-sales services.
What about the plans to manufacture some of your products in the Egyptian market?
Currently, we have a television factory in Beni Suef and everything is stable there, as the factory produced 1.6 million devices worth $500m. 85 inch screens were also manufactured in our Beni Suef factory. We export nearly 80% of the factory’s production to more than 36 countries. It is one of the five most important Samsung factories in the world. Our investments in the factory are estimated to be $270m so far. We are always considering investment opportunities in the Egyptian market, whether through manufacturing products in other company’s factories, such as the air conditioner factory in partnership with Raya.
What is your market share in the televisions sector?
It is 35% and we lead market sales.
After the Pound flotation, the purchasing power of local consumers declined. How did you deal with this and how did it affect the installment and maintenance services?
Inflation in Egypt reached 35% but it is declining and recently, the market started to recover. The main reason the market was affected over the past period was the increase in the prices of devices which made us seek to help consumers buy our products with payment facilitation, in partnership with others.
We have launched installment services while easing procedures. We started doing this for the high-priced segment of phones, then gradually we started including more price segments through a number of chain stores, and we are now expanding further.
The upcoming step will witness providing installments for most of the consumers through personal finance solutions in order to suit the needs of all consumer segments on all our products, through partnerships that offer installment services, and through some banks.
Currently, the negotiations with Aman, an affiliate of Raya, are taking place in order to be provided to consumers next year.
Regarding maintenance, we have seen an increase in post-sale services, especially for devices that are out of warranty, which made us reduce the prices of spare parts.
What are the main themes of your plans in 2018? Have the price segments of your devices changed after the Pound flotation?
The prices segments changed in Egyptian Pounds after the flotation. The segment with prices that started from EGP 1,000 now starts from EGP 1,500. The 32 inch television now starts from EGP 3,500.
In terms of our plans for the future of household devices, we work to be present in the high-prices segments. However, in the television sector, we will work to maintain our top position in the Egyptian market, supported by using the latest technologies in the market. As for the mobiles sector, we are working to launch products that suit all price segments. In addition, there is a strong chance for growth in the higher segment according to what we have noticed in the market recently.
What are the most popular phones by Samsung in 2017?
Several phones are very popular in different price segments, however, the most popular phone in 2017 was J7 Prime.
What are the factors affecting the choice of Egyptian consumers when purchasing a phone?
Screen size is one of the most important factors, as well as memory storage and battery capacity. Consumers in Egypt pay attention to modern technology in the device, not just the price.