Samsung has emerged as the top brand in Asia for the seventh year in a row in 2018. While last year we watched with interest to see whether the exploding Note 7 phone disaster would knock the South Korean electronics powerhouse from its top spot in Nielsen’s Top 1000 Brands chart, this year Samsung’s status as consumer’s number one brand was a little more predictable.
The past 12 months have seen the brand release the Galaxy Note 8 in September, which helped it to record profits in the last quarter of 2017. Other high profile releases in the form of QLED TVs, the Gear Sport smartwatch and the Galaxy S9 and S9+ phones, launched in February, followed. In April, Samsung profits exceeded predictions thanks to demand for its memory chips used in phones and servers.
The brand’s strategy has taken a noticeable shift in direction, too, with Samsung getting behind various projects to highlight its position as a ‘for social good’ brand. In April, for instance, Samsung Italy helped create a restaurant designed to address challenges that prevent people with autism from getting into the workplace. In the same month, in Thailand, a partnership with BBDO Bangkok led to the creation of an Android keyboard that - allegedly - assists people in supporting friends who are feeling low to “prevent tragedy from depression”. (It must be said that we at Campaign Asia-Pacific were not convinced).
This is the right approach, thinks Jonathan Cummings, chairman, Hong Kong, Fitch. “It’s an important element to show the human side. With somebody like Samsung where you've got such strong R&D power, then the world starts to expect that from them.” Cummings thinks we’ll start to see more talk about how tech improves lives from brands like Samsung in future, with less of a focus on clever engineering itself.
A few unnerving news stories have continued to emerge around Samsung leadership, however, notably involving the resignation of one of Samsung Electronics’ three chief executives, Kwon Oh-hyun, who left in October citing an “unprecedented crisis inside out”; and the naming of chairman Lee Kun-hee as a suspect in a major tax evasion case in February. But these don’t appear to have left any dent in consumer enthusiasm.
“The leaders...are not particularly high profile as individuals,” says Cummings. “With a huge corporate like Samsung people are judging them on the quality of products they produce and I think they are big enough, strong enough as a brand to ride out that sort of thing.”
Samsung’s size has also helped it hang on to its position at the top, of course. Mobile phones are just one category in a range that spans the entire consumer electronics sector so when different sectors surge forward - wearables, for example, are starting to gather pace - or fall back, Samsung appears to have enough purchasing heft to ride the waves giving them a major advantage over competitors, says Cummings.
“Their scale, their size, the sheer volume of R&D power that they have - in terms of product development they are obviously the biggest in the world and right up there. And then at a consumer facing level they are again so big, so global. They have such a strong presence in retail either through their own stores or through third party stores.”
Size apart, Samsung is also set apart by the way it has nailed consistent branding - across its retail portfolio but particularly around mobile phones, says Jerry Clode, head of digital and social insight at Resonance China.
“One of the strongest things they do here in China and across Asia is their retail presence,” says Clode. “A number of brands in this category have just thought ‘OK, we’ll just make sure the phones are there, make sure we collaborate with the right telecom providers and the flagship service stores, that'll do the trick’, and then they spend a lot of money on digital. I don't think Samsung does this. They are very, very clear on how their stores or their branded counters communicate with the people that man them in terms of what they wear and how the products and the product portfolio is presented and that’s always been very consistent.”
Samsung in numbers
US$539 million: the amount a US court recently ordered Samsung must pay Apple for copying patented smartphone features, after a trial that lasted seven years
US$14.7bn: Samsung’s operating profit for the first three months of 2018
150: the number of jobs that will be provided by the new AI centre Samsung is building in Cambridge, UK, joining two others planned for Toronto and Moscow
2020: the year by which Samsung hopes to have AI technology enabled on all its smart devices
40 million: number of slim type TVs Samsung will ship globally in 2018
In tier two and three cities in China, where challenger brands like Xiaomi and Oppo are gaining popularity, this makes a real difference, says Clode, because people in these areas still want to trial and feel technology products before they buy.
Samsung excels at branding its outlets, offering consistent service and making sure its phones are in stock, something that’s particularly important. “You go to a Xiaomi store and you want to buy the popular phone - its not there,” says Clode. “They are trying to do a mystique-y, Apple thing, but it doesn't feel quite right for Xiaomi. Samsung are more about their credibility and ensuring accessibility to the brand is also really important. It sounds a bit traditional, but they haven't abandoned those traditional touchpoints, which is really important in this category.”
The only way challenger brands might steal a march on Samsung, thinks Clode, is if they manage to catch millennials and members of generation Z when they’re buying their first phones, thus missing out on a crucial part of the purchase journey. “There's a chance they may actually be strongly enticed through the local brands and promotions around mobile gaming and these kinds of things,” says Clode. “Samsung probably does well across life stages but they will have to invest in a level of brand rejuvenation in China and elsewhere otherwise those brands will be more visible and more engaging.”
Will the unpredictable whims of Generation Z succeed in harming Samsung in a way that exploding phones and leadership scandals have not? It seems unlikely at present but, as Cummings says, things now move so fast in the world of electronics that a brand is only as good as its last product.