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Korea Inc. losing ground in China

July 15,2017
The Chinese consumer market, which once offered vast opportunities for Korean exporters, has become less penetrable as Chinese firms make goods that compete with imports, industry data showed Friday.

Samsung Electronics, which in 2012 ousted Apple to hold the top market share for smartphones in China, fell to eighth place in the first quarter of this year. Its market share hit 17.7 percent in 2012 and rose to 19.7 percent the next year before losing ground.

It dropped to 13.8 percent in 2014, slid to 7.6 percent in the following year and stood at 4.9 percent in 2016. In the first quarter this year, its market share was a marginal 3.1 percent.

Chinese brand Huawei raised its market portion from 9.9 percent to 18.9 percent over the past five years. Another local firm, OPPO, which had no presence in 2012, soared to grab 18.7 percent during the period. Together with Vivo, the three are dominating the Chinese smartphone market.

Korean exports and other China-connected businesses like tourism and shopping have all been suffering from a diplomatic row over the deployment of the U.S. antimissile system known as Thaad.

Beijing is concerned that the system, intended to counter threats from North Korea, will also catch China’s own missile movements, and China is seen as retaliating against Korea’s decision to host the system on its soil.

Industry officials say that data indicates Thaad may not be the only cause of falling Korean exports to China as firms there are quickly catching up in technology and no longer relying on foreign products.

Samsung Electronics is a dominant label in the global TV market but not so in China. Its first-quarter standing in the Chinese market was 3.9 percent, placing it at 10th place. All nine higher rankings went to Chinese makers.

“The speed at which Chinese products are pushing out Korean products is startling,” a corporate official said. “We have nearly lost the Chinese market, and the situation is serious in India and other countries as well.” YONHAP