Euroset and Svyaznoy stopped buying Samsung smartphones, said representatives of retailers. They say that the reason for stopping purchases is a large number of defects in the products of the Korean company.
Euroset, Svyaznoy, as well as retail chains MegaFon and VimpelCom have suspended purchases of Samsung smartphones, the Vedomosti newspaper writes with reference to representatives of retailers.
The president of Euroset, Alexander Malis, explained to the publication that the purchase of Samsung smartphones was suspended two months ago due to the increased number of defective products from the Korean company. "The marriage occurs always and everywhere, but the average acceptable level in the market is less than 1%, and Samsung has a marriage rate of more than 7% for certain parties," Malis said.
According to the president of Euroset, problems mainly arise with the software of the devices, the service centers of Euroset fix them, but mostly for their own money. Malis emphasizes that the difference between the total amount that Euroset reimbursed buyers of defective Samsung smartphones for several months, and the warranty payments from the company itself, according to Malis, already exceeds 180 million rubles. - earlier the gap was an order of magnitude smaller. Representative of "Svyaznoy" Maria Zaikina, in turn, told "Vedomosti" that the retailer now also buys neither smartphones nor Samsung tablets. She stressed that in recent months, cases of return of Samsung gadgets due to factory defects have increased.
The representative of VimpelCom also explained to the publication the suspension of the purchase of smartphones and tablets from the Korean company by the increase in the number of defective devices in deliveries. MegaFon's representative Tatyana Zvereva told Vedomosti that work with Samsung has been suspended until the unresolved issues between the companies are resolved.
The president of Euroset, Alexander Malis, said that in early June, the retailer, having failed to agree with the Russian office of Samsung on rectifying the situation, sent him an official claim. According to Malis, according to the rules of the Moscow Commercial Arbitration Court at the Chamber of Commerce and Industry, Samsung has 60 days to resolve the problem, which expires in early August. Malis admitted that this case would have to be decided in arbitration.
Samsung representative Yana Rozhkova, in turn, told the publication that Samsung smartphones are one of the most reliable on the market, and the percentage of claims to products from buyers is minimal - about 1% of the total number of phones sold. The high quality of Samsung development centers, factories and test laboratories allows you to control the entire production cycle and be confident in the quality of the final product, a company spokesperson said.
MTS adheres to the same position. The return rate of Samsung equipment is scanty and is constantly decreasing as new models are released, even against the background of growth in sales of this manufacturer in MTS retail, said a representative of the company Dmitry Solodovnikov. Before entering into a long-term relationship with a manufacturer, MTS analyzes the quality of its products and for this reason does not work with individual B-brands, Solodovnikov noted. “It’s strange that retailers, which accounted for a significant share of Samsung’s sales in Russia, suddenly began to experience problems with the manufacturer after MTS reduced the prices of gadgets as part of its long-term strategy to stop making money on devices to stimulate growth in data revenue”, - he noted.
As noted by Vedomosti, VimpelCom and MegaFon are co-owners of Euroset (50% each), and Alexander Malis's brother Oleg in December 2014 became the controlling shareholder of Svyaznoy. According to the publication, in the spring of 2015, Svyaznoy resumed sales of VimpelCom and MegaFon sim-cards, which had previously preferred to cooperate with Euroset, and the sale of MTS contracts in June stopped. As an interlocutor close to Samsung noted in a conversation with Vedomosti, MTS focused on its own retail network and sharply reduced prices for smartphones, including Samsung. MTS decided to sell smartphones at cost, making money on mobile Internet access.
According to the source of Vedomosti, the quality of the phones has nothing to do with current events, the reason refusal of retailers from Samsung - the lack of profitability on the sale of its devices, which is caused by the price war in the market.
As the director of the MTS retail network Arvydas Alutis told Vedomosti, all the equipment supplied by Samsung is of high quality and is in demand among customers. He found it odd that retailers were suddenly having trouble with the supplier "after MTS cut prices for portable electronics."
Ten years later, the forgotten confrontation between Samsung and Euroset flared up with renewed vigor. Namely, the products of the Korean manufacturer began to disappear from the windows of the popular retail chain again. Moreover, in the 2015 remake, the situation for Samsung looks more threatening, since Svyaznoy joined the boycott announced by Euroset (which is now also owned by the Malis family),- as well as retail networks of MegaFon and VimpelCom. And only MTS acts exactly the opposite - increasing sales of Samsung within the framework of promotions. Among them, for example, the sale of the flagship smartphone Galaxy S6 to corporate clients at a price of 1 ruble! .. But what is this - a super-profitable offer or a forced markdown? TechnoDrive experts tried to figure out the situation.
Contradictory feelings of retail
The relationship between Euroset and Samsung can be characterized as contradictory. Suffice it to recall the conflict in 2005, when Evgeny Chichvarkin, referring to the short supply from the Korean vendor, announced the sale of Samsung phones on a leftover basis. The purchase of new devices has stopped, and the remaining phones have been assigned a place in the last row on the bottom shelf. Moreover, commissions were canceled for sellers of such gadgets.
At the height of the conflict, the situation reached the point of banning the use of Samsung phones by Euroset employees ... and pasting the South Korean vendor's logos on split systems installed in the retailer's stores.
However, after a while, the eccentric leader of Euroset and Samsung representatives found a common language, and the situation turned 180 degrees. The period of active promotion of Samsung has begun: new promotions, special discounts, the best places on the windows, and so on. In general, after the settlement of the conflict, "feelings flared up with renewed vigor", recalling the well-known proverb "dear scold - only amuse themselves."
As time went on, Euroset changed its owner, but continued to actively advertise Samsung products. And then, suddenly, the relationship went wrong again.
"For a connection without marriage!"
The largest mobile phone sellers, together with key partners, have not been purchasing Samsung devices for the second month. The official reason: a high percentage of defects.
Representatives of large trading companies, as well as Megafon and VimpelCom, which are their partners, reported an unacceptable number of manufacturing defects. For a long time, for this reason, shipments from Samsung have not been resumed. Svyaznoy does not buy any Samsung devices, added Maria Zaikina, head of Svyaznoy's press service. The President of Euroset, Alexander Malis, provided statistics to confirm the problematic situation.
Defects are found always and everywhere, but the average acceptable level in the market is less than 1%, while Samsung has a defect rate of more than 7% for certain batches. - Alexander Malis.
The same figures are cited by the employees of Svyaznoy and VimpelCom. Megafon confirmed its readiness to resume purchases only after the Korean manufacturer solves the problem with the increased percentage of defective devices. Alexander Malis complemented the overall picture with a comment about Samsung's lack of reaction to what is happening, which is why the manufacturer had to send an official claim. At the beginning of August, the 60 days allowed for solving the problem expire, after which the case will go to the Moscow Commercial Arbitration Court.
Samsung representative Yana Rozhkova disagrees with the claims. She is confident in the reliability of the brand's smartphones. The minimum percentage of claims from buyers indicates the high quality of the products, only 1% of the total number of phones sold. Such indicators are several times lower than those of the main competitors in the market. Of course, without taking into account the manufacturers of more budgetary devices. The director of the MTS retail network, Arvydas Alutis, also supported this position, and also shared his vision of the situation.
All the equipment supplied by Samsung is of high quality, is in demand among buyers, the level of returns is scanty and is constantly decreasing even against the background of growth in sales of smartphones of this brand. There are no problems with it, it's not for nothing that Samsung is the sales leader on the Russian market. It is strange that retailers, which accounted for a significant share of Samsung's sales in Russia, suddenly began to experience problems with the vendor after MTS cut prices for portable electronics. - Arvydas Alutis.
The research carried out by Svyaznoy showed a decrease in Samsung's share in the Russian market by more than 25% in monetary terms. [vedomosti]
The two largest Russian sellers of mobile devices, Euroset and Svyaznoy, as well as retail chains of Megafon and VimpelCom, have not purchased Samsung smartphones for more than a month, employees of several retailers told Vedomosti.
Euroset suspended purchases from Samsung about two months ago, citing a significant increase in the share of defective smartphones in Samsung's shipments. Svyaznoy does not buy Samsung devices now - neither smartphones nor tablets, says its representative Maria Zaikina. VimpelCom also temporarily suspended the purchase of Samsung smartphones and tablets due to the increase in the number of defective devices in the supply, his spokesman said. Work with Samsung has been suspended until the unresolved issues between the companies are resolved, says Tatyana Zvereva, Megafon's representative.
Sellers agreed that the acceptable defect rate for the market is less than one percent, while in some Samsung batches this figure is more than seven percent. However, specific models of problematic devices are not named, the president of Euroset Alexander Malis says that the problems are evenly distributed across the entire line of devices. By marriage, retailers primarily mean problems with software, not hardware. Samsung is one of the largest manufacturers of components for smartphones and tablets, so in this regard, complaints about the quality of devices should not arise due to strict control from the manufacturer. Software is another matter. The proprietary TouchWiz shell and the abundance of pre-installed applications have always been criticized by users, and only with the release of the Galaxy S6 running Android 5.0, the situation has changed significantly for the better. Representatives of Euroset note that they independently fix problems with the software of devices in service centers, and they do it mainly for their own money. The difference between the total amount that Euroset reimbursed buyers of defective Samsung smartphones for several months and Samsung's warranty payments, according to Malis, already exceeds 180 million rubles, whereas before this gap was much smaller.
Representatives of Svyaznoy and VimpelCom are talking about the same thing. In Svyaznoy, cases of returning Samsung gadgets due to factory defects have become more frequent in recent months, and unlike other Samsung brands, in the event of repair or replacement of the device due to a marriage, it does not compensate the buyer for damage, which creates an additional financial burden on the retailer. Meanwhile, consumer confidence in the retail network is undermined. The number of defects among Samsung devices, acquired by its offices and know-how salons recently, is 6-7%, which is higher than the average in comparison with other manufacturers, complains a representative of VimpelCom.
Samsung smartphones are one of the most reliable on the market, a representative of the Korean manufacturer Yana Rozhkova told Vedomosti. High quality is confirmed by the minimum percentage of claims from buyers (about 1% of the total number of phones sold), she says; sometimes it is several times lower than that of the closest competitors, not to mention the producers of the second and third echelons. The high quality of Samsung development centers, factories and test laboratories allows you to control the entire production cycle and be confident in the quality of the final product, says Rozhkova.
However, there is another point of view on the problem with Samsung devices - a price war between retailers and operators. This scenario is followed by Eldar Murtazin, a leading analyst at Mobile Research Group, who published a series of articles on the struggle of stores in the Russian market, as well as representatives of the MTS operator. MTS retail stores began selling smartphones at cost, making money not on them, but on mobile Internet access, the audience of which should expand thanks to cheap smartphones. Thus, other sellers of mobile devices found themselves in an unpleasant situation, unable to offer similarly low prices. All the equipment supplied by Samsung is of high quality, is in demand among buyers, the level of returns is scanty and is constantly decreasing even against the background of growth in sales of smartphones of this brand, director of the MTS retail network Arvydas Alutis told Vedomosti. There are no problems with it, it is not for nothing that Samsung is the sales leader in the Russian market, he says. It is strange that retailers, which accounted for a significant share of Samsung's sales in Russia, suddenly began to experience problems with the vendor after MTS cut prices for portable electronics.
Updated (Samsung Official Comment):
Samsung invests significant resources in research and development to ensure that customers are guaranteed the best products on the market. It is thanks to the high quality standards that Samsung has become the world leader in the mobile device market, leading the ratings of its favorite brands. Samsung components are used by other manufacturers who are confident they will be able to guarantee the highest quality smartphones. At the same time, our goal remains unchanged: to offer Russian consumers the best products.
According to the newspaper Vedomosti, Euroset (owned by Megafon and Beeline), Svyaznoy, retail Megafon and Beeline have stopped purchasing smartphones and tablets from Samsung. Moreover, this was done in the third decade of June.
The official reason for the suspension of purchases under existing contracts, according to Alexander Malis, President of Euroset, there was a significant drop in the quality of Samsung products.
"Marriage occurs always and everywhere, but the average acceptable level in the market is less than 1%, and Samsung has a defect rate of more than 7% for certain batches," he said. Alexander Malis.
It is noted, however, that problems with Samsung devices are mainly due to software bugs. They are fixed in Euroset service centers, but mostly for their own money, which does not suit the retailer. In addition, Samsung, unlike other companies, refuses to compensate customers for damages. Therefore, in fact, the costs of returning funds are borne by the direct sellers. Representatives of the network claim that returns of Samsung gadgets due to defects have become more frequent in the past few months.
To the question of the correspondent "Be mobile" about which models of smartphones began to be supplied with a marriage, Alexander Malis answered that everything. “This applies not only to flagship devices and new models. This applies to the entire line of the company. We cannot sell two or three Samsung models. We need a complete assortment, ”he said.
When asked why they began to speak publicly about defective devices only now, the president of Euroset said that “earlier all issues were resolved constructively, and now Samsung is not going to cover the costs of service repairs”. At the same time, Euroset is going to defend its point of view and is ready to go to court. The corresponding work has already begun, the company explains.
In early June, Euroset, unable to agree with Samsung on compensation for the costs incurred for the maintenance and repair of smartphones, sent an official claim. The terms of the settlement procedure assume a counter-offer from the Russian representative office of the South Korean company within 60 days, but so far it has not been followed.
As for other market players, VimpelCom (Beeline brand) and Svyaznoy support Euroset's position regarding the growth in the share of devices with factory defects. Tatyana Zvereva from Megafon said that at the moment there were some disagreements with Samsung, and purchases would not resume until they were settled.
Representatives of M.Video, Mediamarkt and Eldorado stated that they do not plan to abandon sales of Samsung smartphones and tablets, the percentage of factory defects in their retail chains has not changed recently and is within 1-2%.
Yana Rozhkova, PR manager of Samsung in Russia, expressed confidence in the high quality of the company's tablets and smartphones. According to her, the percentage of defects does not actually exceed 1%, which is often several times less than the indicators of competitors.
“Samsung invests significant resources in research and development to ensure that customers are guaranteed the best products on the market. It is thanks to the high quality standards that the company has become the world leader in the mobile device market, leading the ratings of its favorite brands. Samsung components are used by other manufacturers who are confident they will be able to guarantee the highest quality smartphones. At the same time, our goal remains unchanged: to offer Russian consumers the best products, "- said in the Russian office of Samsung.
Market experts believe that the refusal to sell Samsung smartphones and tablets in four retail chains in Russia is caused not by the growth of marriage, but by insufficient sales profitability associated with the aggressive pricing policy of MTS.
The fact is that since May 2015, the MTS retail network has begun selling Samsung mobile phones and tablets with a minimum or zero mark-up. Devices of this brand fell in price by 20% in two months. At the same time, purchase prices remained at the same level. A similar drop in prices was observed for devices from Microsoft (Nokia), Alcatel, Huawei.
MTS has significantly reduced the prices of devices in the expectation that the users who bought them will bring more income due to the growth of mobile traffic. The company gave up short-term earnings on the sale of equipment for the sake of permanent earnings on the mobile Internet, says its representative. Dmitry Solodovnikov... The cost of devices has been reduced to purchase ones, for a number of models the decrease has reached 30%, Solodovnikov notes. “The long-term goal is to increase the Internet revenue of the cellular business of the parent MTS at a faster pace than the market. Therefore, we encourage subscribers to buy smartphones, because these are the subscribers who consume more mobile traffic and, due to them, the average monthly bill grows, ”says a representative of MTS.
It is not known how justified such a strategy is. MTS does not disclose the results of its program implementation. However, now the retail operator sells a number of models "at zero" or even "at minus" from the purchase price, says Yuriy Bader-Baer, director for purchases of mobile equipment of the Eldorado network.
A sharp decline in prices automatically affects all players and reformats the market for everyone, without exception, claims Leading Analyst of Mobile Research Group Eldar Murtazin... Following MTS, other market players, for example, Euroset, Svyaznoy and others, are forced to change the numbers on the price tags.
To replace Samsung's assortment, Euroset resumed cooperation with Sony. In early July 2015, a full lineup of Xperia smartphones and tablets appeared in the retailer's showrooms. It is worth noting that the main criticism from Euroset against Sony for many years was precisely the massive factory defect, which reached 10% of the total production volume. “Now we have no complaints about Sony products. We are completely satisfied with the quality, - said Alexander Malis.
Samsung's termination of purchases plays into the hands of another vendor, Lenovo. Euroset, Svyaznoy, retail Megafon and Beeline increase the number and range of smartphones of this brand.
Lenovo confirms this trend. The stock of goods in the company's warehouses is about two weeks, says Lenovo representative in Russia Marat Rakaev... “All our smartphones are dismantled“ off the wheels ”. However, in the very near future, additional consignments of goods will reach the Russian market, and we will satisfy the increased demand, ”he noted. Rakaev noted that the growth in demand for mobile devices was a "pleasant surprise" for the company.
To replace Samsung products, retailers besides Sony and Lenovo are expanding purchases of smartphones and tablets from LG, Fly and other brands.
Interestingly, on the sidelines, representatives of retailers are hoping for an early resumption of cooperation with Samsung. This will happen as soon as MTS stops selling smartphones and tablets of the Korean brand "in the red".
