Samsung suffers backlash in China over the ”faulty response”.doc

1、1Samsung suffers backlash in China over the ”faulty response”Liu Jingtang was a Samsung loyalist. The Shanghai technology consultant traded up steadily through its smartphones to the new Note 7. But Lius devotion was shaken by the Korean tech giants confusing response to its latest product safety sc

2、are. Liu， 32， said Samsung Electronics quickly confirmed his Note 7 wasnt covered by a recall announced last week. But he said after reports China might have suffered its first explosion of the problem-plagued phone， Samsungs announcement that it saw no problem with the battery with no other expla-

3、nation left him baffled.”My loyalty to Samsung is bound to decline by a lot， ”said Liu. “Samsung was my priority， but not anymore.” China should be a bright spot for Samsung as it wrestles with a global recall of 2.5 million of its new flagship smartphones. The company has not confirmed any in China

4、 suffer the same problems that led to fires in the United States. But its brand has been battered by complaints it is doing too 2little to reassure Chinese owners their handsets are safe. The potential damage to its image threatens to disrupt Samsungs efforts to use the Note 7 to propel faster growt

5、h in a crowded Chinese market where it has slipped to sixth place after being the No. 1 brand as recently as mid-2014. Chinese consumers are unusually alert to safety issues following an avalanche of scandals over shoddy or fake food， medicines and other goods. They also are sensitive about being tr

6、eated as well as Western consumers. “I think consumers are pretty unhappy with Samsung， ” said Ben Cavender of China Market Research Group.“Consumers start to feel like they are being taken advantage of， that they are not being accorded the same respect here as they are abroad.” Asked what it was do

7、ing to reassure Chinese consumers， Samsung said in a statement it is confident about the safety of Note 7s sold by authorized outlets. IKEA suffered a similar backlash in June after the Swedish furniture recalled dressers in the United States and Canada due to concerns they could tip over and harm c

8、hildren. When the company didnt immediately do the same in China， people posted angry comments online asking whether it valued Chinese lives less. IKEA announced a recall in China in July. 3Samsung has blamed the fires on a manufacturing flaw in batteries and said Note 7 units sold in China would no

9、t be affected because theirs came from a different supplier. On Monday， Samsung said its investigation into the first report of a Galaxy Note 7 fire in China found unspecified “external factors” might be to blame. It said it was unable to investigate a second fire report because the consumer refused

10、 to hand over the charred phone. Liu， the technology consultant， said the statement made him question why Note 7 phones sold in China would be different from those sold abroad. “They hastily put out this statement. Was that really good？ I think it was unsatisfactory， ” said Liu. As for external fact

11、ors， he said， “does that mean the customer deliberately heated it over a fire？ That doesnt make much sense.” Samsung surprised customers by saying no phones in China were covered by its global recall and then recalling 1，858 phones. It said those were distributed for testing before sales to the publ

12、ic began. “For Samsung to recall only 1，858 units in China while it recalls 1 million in the United States seems insincere， ”said a comment left on a website of the Communist Party newspaper Peoples Daily. “Whether those phones that are not recalled 4will wind up being a prob-lem or not will be a bo

13、mb planted in the hearts of customers， ” it said. Samsung is the worlds biggest smartphone brand by number of units sold but in China it trails market leader Huawei Technology Ltd. and three other local brands Vivo， Xiaomi and Oppo. Apple Inc.s iPhone was in fifth place in the first half of this yea

14、r. The Note 7 “was a good opportunity （to expand sales） ， but they blew it， ” said Liu. Working in Samsungs favor is the fact that phones are sold through retailers in China instead of carriers. That allows users to switch brands quickly and new competitors to enter the market.“In any given month， a

15、 brand is going to leapfrog another brand and come up with a brighter screen or bigger battery of faster charging， ” said Cavender. On Tuesday， the Note 7 was on sale at electronics retailers and shops run by state-owned phone carrier China Mobile Ltd.， though employees said customers were asking ab

16、out the reports of explosions. “Sales for Note 7 were slightly affected by the incident but we are still selling them， ” said a saleswoman who was reached by phone at an outlet of Suning， the countrys biggest electronics retailer， in the Wangjing neighborhood on Bejiings northeast side. “We are maki

17、ng 5explanations to customers every day， it is up to the customer to believe it or not.” The Note 7 was sold out in black and only available in gold at a China Mobile store in the capitals eastern business district， said a salesman who would give only his surname， Li. He said a customer bought one T

18、uesday and no one asked about the report of an explosion. “There are some customers who only favor Samsung and they dont bother asking questions， ” said Li. Longer term， the Note 7 in China is likely to “take a major sales hit， ” said Cavender. “People who want to buy a phone are going to switch to

19、Apple or to a local brand like Huawei， ” said Cavender. “Or if they want a Samsung， they probably are going to wait for the next generation， because they dont want to take the risk that they will get a faulty product.” Samsung Electronics Co. sought to distance fresh reports of phone combustions in

20、China from its global recall Monday， saying that for at least one case， it believed the fire began outside the phone. It remains to be seen if the brand damage to Samsung among Chinese consumers will be lasting. Stores pulled the devices off shelves Monday and buyers scrambled for refunds after 6pho

21、tos of charred Galaxy Note 7s went viral in China over the weekend. Some Chinese consumers were already miffed thataside for a small presale batchthe country wasnt included in Samsungs recall of 2.5 million Galaxy Note 7s in 10 some countries due to battery overheating， even though Samsung has said

22、phones sold in China arent faulty. Buyers in China are sensitive to perceived second-class treatment， especially after a controversy in which Apple Inc. was found to be offering different warranty terms in China than the U.S. Korean tech giant Samsung is trying to replace some of the 2.5 million sma

23、rtphones it has recalled in 10 countries， citing fire-prone batteries. The recall has hit its market value. Two reports of phone combustions Saturday and Sunday added to the controversy. The phone owners posted photos online of their blackened phones and said the devices combusted during normal use.

24、 “The test results show that the damage to the device was caused by external heating， ” Samsung China said in a statement. Amperex Technology Ltd.， the Galaxy Note 7s battery supplier for handsets sold in China， said Monday that tests 7conducted jointly with Samsung on one of the burned devices prov

25、ed its batteries didnt start the fire. “Based on the burn marks on the specimens， we inferred that the source of the heat came from outside the battery itself， ” Amperex said in a separate statement. “There is a large probability that other outside factors were the cause of the heating problem.” Sam

26、sung has tipped faulty batteries as the cause for combustion cases outside of China. In the global recall， most of the problematic batteries were from Samsungs own affiliate， Samsung SDI Co. with phones sold in the China market containing batteries from Hong Kongbased Amperex， The Wall Street Journa

27、l has reported. Because the batteries were supplied by another manufacturer， Samsung went ahead with the launch in China on Sept. 1. But last week， it recalled a small batch of test devices sold before the official launch in China after discussions with a regulator， citing problems with overheating.

28、 It is unclear if Samsungs statement will be enough to appease consumers in China， which has been one of the companys toughest markets due to up-andcoming local rivals. The two China combustion reports played prominently in 8local media over the weekend， chilling sales. While Chinas three major tele

29、com operators havent halted sales of the device officially， some individual branches have. At one China Telecom branch in Beijing， a salesman said the company had stopped selling Galaxy Note 7s on Monday due to concerns over battery explosions. Five other major carrier stores in Beijing and Shanghai

30、 visited Monday didnt sell Galaxy Note 7s. A China Unicom spokeswoman said she wasnt clear on the situation. China Telecom and China Mobile didnt reply to requests for comment. The Galaxy Note 7 was listed as sold out much of Monday on Chinese online retailer JD.com， the vendor for the two devices t

31、hat exploded， but sales later resumed online. It said it had referred the case to Samsung for investigation. The two phones sold through JD.com were authentic Samsung devices， said a person familiar with the matter. JD.com was inundated with Galaxy Note 7 refund requests Monday， according to online

32、posts by phone owners. Many consumers had exceeded the 7-day refund period but still sought to return them. The two exploded devices were purchased after Samsungs official launch in China on Sept. 1， unlike the 9China presale units that Samsung is recalling， according to receipts posted by owners online.