Chinese consumers are giving Samsung the cold shoulder after the hot mess that was the Galaxy Note 7.
The fire-starting phone has sparked a crisis for Samsung globally, but there’s one very important group of consumers who really aren’t happy with how Samsung has handled it — and they’re in China, the world’s largest smartphone market.
An expanded US recall was ordered October 13, 2016 for Samsung Galaxy Note 7 smartphones, including replacements for the devices plagued by exploding batteries.The Consumer Product Safety Commission announcement, formalizing the action announced by the South Korean giant, said the recall affects 1.9 million handsets, including the one million announced in a September 15 recall.
/ AFP PHOTO / LLUIS GENELLUIS GENE/AFP/Getty Images Lluis Gene / AFP – Getty Images
“China is a greenfield market opportunity” — that is, a relatively unexploited market — “for Samsung, Apple and other smartphone providers over the coming years,” Daniel Ives, senior vice president at Synchronoss Technologies, told NBC News.
“With headwinds across the U.S. and European markets, China has been the golden jewel in the smartphone market, showing healthy growth, which speaks to the importance for Samsung on the horizon,” he said.
Related: Taking a Banned Galaxy Note 7 on a Plane? Prepare to Pay
Whether Samsung can kiss and make up with the Chinese market will become evident in the coming months — and it will largely depend on the company’s products and public relations, Ives said.
Last month, China’s state broadcaster, CCTV, slammed Samsung for “discrimination” and “arrogance” in its initial response after news emerged that some Note 7 phones had overheated, according to reports.
It was in stark contrast to the United States, the broadcaster pointed out, where customers received an apology, along with exchange options and incentives. Meanwhile, customers in China were initially told in a brief statement that most phones didn’t need to be exchanged, according to Reuters.
One Chinese man who took a video of his sizzling smartphone was reportedly visited by two Samsung employees, who offered him a new Galaxy Note 7 and $900 to keep the video private — an offer he refused, according to The New York Times.
“It’s even more important in China for Samsung to repair its credibility, because there are so many Chinese alternatives like Huawei, Oppo and Lenovo,” Patrick Moorhead, principal analyst at Moor Insights & Strategy told NBC News.
“Samsung needs to quickly tell Chinese consumers what happened, when it happened, why it happened and why they should trust the company,” he said.
Related: First U.S. Suit Filed Over Exploding Samsung Galaxy Note 7 Smartphones
Last week, the company detailed a new reimbursement plan for mainland China, offering a full refund and a 200-yuan (US$29.66) “bonus” for returned Note 7s. Those who choose to buy the company’s Galaxy S7 or S7 Edge would get a 600-yuan (US$89) bonus, it said.
Samsung didn’t respond to multiple attempts for comment from NBC News. However, in a statement to The New York Times, it called China “one of the most important markets” and apologized “for any misunderstandings this may have caused the Chinese consumers due to an unclear communication in the process.”
The company also said that it doesn’t hold a double standard and that its quality control is the same in all of its markets.
China’s tech-hungry customers have shown in the past that they can be forgiving of companies that handle a crisis the right way.
In April 2013, Apple Chief Executive Tim Cook wrote a letter apologizing after the company received complaints about its customer service and warranty policies. He outlined new steps Apple planned to take to improve the customer experience.
Only time will tell whether Samsung can regain its trust and momentum in China, Ives said.
“They definitely have a bit of an uphill battle from this situation when it comes to how they recover,” he said.
