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The Mobile Phones Landscape and “Samsung”, the Brand, in Malaysia

In the fiscal year of 2019, the mobile phone experienced approximately a 3% growth performance in  sales in Malaysia , where new product launches are primarily in mid-ranged phones. Players must also focus on high quality products with affordable pricing to remain relevant in this market. We find that Samsung is the largest player in the market, while Apple trails far behind with half of Samsung’s market share, closely followed by Hwawei and Oppo. 

Our Biggest Technology Spenders:

The “Millenials”

(24 – 40 years old)

Being the largest group in the workforce, we estimate that the “Millenials” segment remain the highest in terms of sales correspondingly, mainly because this segment will have an increase in disposable income as they are advancing in their careers, where they will upgrade their phones to a better model as time goes by. This is supported by BCG’s observation where the Millenials are entering in their peak spending years. Whether they want to use their mobile phones for business, studies, gaming or purely lifestyle purposes, Samsung has a solution to each of the consumer requirements. Samsung may also expect some loyalty from this segment of customers as these consumers grew up with using Samsung related products (being the long term marketshare leader in Malaysia) in addition to Samsung being top notch in technological advancement for mobile devices. This is consistent with the Millenial generation whom engages with brands, channels, and service models in new ways being limited only by the rate of technological advancement and innovation .

Digital Immigrants with High Disposable Income:

The “Gen X”

(41 – 55 years old)

Next, “Gen X” is the segment whom are the digital immigrants out of all the generational segments. They are more conservative than the rest in terms of brand choices  (adverse to experimentation), where they  prefers honest and clear product and marketing messages that outline an obvious path-to-purchase . As such, we find that it is worth it to win this segment over by way of authentic and honest marketing, with face-to-face assistance without an up-sell, especially where this segment has a significant disposable income . 


With this significant disposable income, we see that Gen X would make the more expensive purchase on the higher end models. Additional upsides to attracting this segment would be ensuring brand loyalty with Samsung, where Samsung is prized for its brand reliability and appeal to this segment whom are comfortable both with fading technologies and with newer ones . Samsung has stuck to its OS features almost the same with only its aesthetic customization of icons and features. 


We predict that this segment would experience a modest growth rate of 2-3% in view of COVID-19, which spurred the acceleration in digitization, overshadowed by income disruptions, in addition to the spending habits where segment may have a lower replacement rate of their mobile phones compared to the other generations.

Digital Natives:

The “Gen Z”

(18 – 24 years old)

Lastly, we feel that the “The Gen Z” segment would rank second in terms of their purchasing units for the Samsung brand. This is because students or young working adults would usually choose Samsung mobile phones for the camera functions and sleek, edgy and colorful designs. This is supported by Gen Z’s tendency to be the most educated, mobile, and connected consumers to date; while being socially conscious, tech-savy, particularly innovative and permanently looking for change .


Samsung, being the more affordable brand in Malaysia, offers this range of customer of product that is known as “premium smart phones” product lines, where such mobile phones are loaded with features while being the downsized version of flagship phone models. However, the growth rate on mobile phone purchase predicted for this segment would not be as high as those of Millennials because this customer segment often constantly shifts to other brands which offers best features with the lowest price. Nonetheless, Samsung must definitely engage with this generation to ensure long-term sustainable loyalty and customers for its brand – whereby the brand has been successful through launching online workshops and video making competitions targeted towards this generation group. 

In Conclusion

According to the CONSUMER ELECTRONICS IN MALAYSIA – ANALYSIS (Passport: August 2019), Samsung has a total of 20.3% market share in Malaysia and a total net operating income of RM326 million. Samsung, being strong in its supply chain management and the behemoth in the mobile phone industry, would maintain its operations while other smaller players would perish – thus keeping its strong position in the market.


As such, we make the assumption that all generational segments for Samsung smartphone business in Malaysia will grow at a constant rate of 3% in view of slow economic recovery from the Covid-19 effects. Thus, if the the growth for each of our segment increases proportionally each year, by the end of year 2024, Samsung would approximately have a total of RM1.637 billion in its projected earnings for all 3 segments!

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References

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