Technological Loss of Ground Samsung's Withdrawal from China's Household Market Could Be Just the Beginning

Related Vendors

Taiwan Machine Tool & Accessory Builders' Association (TMBA)

SIMTOS (Seoul International Machine Tool Show)

After decades in the Chinese consumer goods market, Samsung will hardly sell any televisions or household appliances there in future. While Chinese manufacturers are building networked AI ecosystems, international brands are coming under increasing pressure. The Samsung case shows how quickly companies in China can lose touch technologically and strategically.

After 34 years in China, Samsung Electronics is giving up its household goods business there. On May 6, 2026, the South Korean company announced on its Chinese website that it would no longer be selling televisions, monitors, air conditioners, refrigerators, washing machines, dryers, audio devices, projectors, vacuum cleaners and air purifiers in the People's Republic. Only smartphones, semiconductors and medical devices remain on offer.

In April, Samsung's televisions had a market share of 3.62% in Chinese stores, according to data from the industry medium DoNews. Washing machines only accounted for 0.38 percent and refrigerators for 0.41 percent. Television sales in China have fallen to around five percent of their former peak, while sales of household appliances have fallen to less than one percent, Chinese trade media reported.

But the Domestic Industry is Booming

Hisense, TCL, Xiaomi, Skyworth, Haier, Konka, Huawei and Changhong are the winners. According to figures from market research company Runto Technology, the eight largest Chinese TV brands together hold 94.1 percent of the Chinese TV market. All foreign brands together, i.e. Samsung, Sony, Philips and Sharp, sell less than one million sets per year in the People's Republic.

According to figures from market research firm Omdia, Samsung has led the global TV market year after year without interruption since 2006. The Group held 29.1% of the global market in 2025, and as much as 54.3% in the premium segment above 2,500 US dollars. In China, however, the brand is barely visible.

What Samsung learned in the Chinese consumer business was a bitter lesson or two about the speed of the competition. TCL brought mini LED TVs to the mass market as early as 2021, while Samsung only launched its own mini LED line in 2022, albeit with relatively high prices for the Chinese market above 15,000 yuan, i.e. around 2,000 US dollars per device.

The situation is similar for AI-supported household appliances. While Haier has now installed its "AI Eye 2.0" system in refrigerators, washing machines and air conditioners and Midea launched the world's first air conditioner networked with Deepseek last year, Samsung's AI devices and MicroLED televisions in China are still in the demonstration phase, writes the Chinese tech portal Lei Keji.

Integration is the Problem

It is not that Samsung has not developed such AI-enhanced products, it is just that it has apparently not considered it necessary to localize them sufficiently in China. Samsung has apparently relied too much on the superiority and quality of its South Korean products, but at the same time has not made enough effort to integrate them into Chinese ecosystems.

The retreat that has now been announced is almost suitable for a course at business schools in China. Multinational corporations that make their decisions very obviously from headquarters and on the basis of Excel spreadsheets, without involving the local team in China to any great extent and without seeing the dynamics on the ground, will fail in China in the long term.

Once market share is lost, at the latest, this becomes clearly visible, even if most analyses remain on the surface. "The retreat reflects normal market dynamics and underlines the growing competitiveness of domestic brands, whose products are now on a par with those of their international competitors," industry analyst Liu Dingding told the Global Times. With such low market shares, the investment in personnel and marketing is no longer worthwhile.

In Which Areas Will the Bracket Be Missing in Future?

Of course. The Excel tables don't lie. What Samsung also lacked in China recently was the ecosystem bracket that Chinese brands now work with. Xiaomi combines smartphones, electric cars, robots and household appliances under one platform. Huawei connects cars, smartphones and household appliances via its Harmony operating system.

Haier and Midea are investing in robotics and cooperating with car manufacturers. Although Samsung has comparable components with Smartthings, Harman automotive electronics and the Ballie home robot, it has never integrated them into a uniform platform in China.

In other words, Samsung has also let the megatrend of convergence, the merging of different technologies and industries, in China pass it by more or less unused. Samsung's TV and household appliance divisions lost a combined 200 billion South Korean won in 2025, around 145 million US dollars. However, the Samsung Electronics Group as a whole is currently reporting record profits. In the first quarter of 2026, operating profit rose by 755 percent compared to the previous year, driven by the boom in AI memory.

Lucrativeness in the AI Sector

The "Device Solutions" business unit, which combines semiconductors and foundry, generated 61 percent of Group sales. The memory business alone achieved record quarterly sales of 74.8 trillion won (around 55 billion US dollars), an increase of 292 percent compared to the previous year. This week, Samsung's stock market value climbed to one trillion US dollars for the first time, the second Asian company after TSMC to do so.

Samsung today is a little like Dupont in the late 19th century. The American company began with gunpowder and developed into a materials manufacturer that no longer built weapons, but became indispensable for all those who did. In business English, the term "shovel seller" has become common for such companies. These are the people who sell the shovels during a gold rush.

Samsung supplies memory chips and OLED panels to Haier, Midea, Xiaomi and all others that manufacture televisions, refrigerators and AI-enabled household appliances in the People's Republic. The management has apparently decided that the Group will no longer necessarily have to sell its own televisions there. But Samsung's decision to withdraw from the home appliance market in favor of concentrating on the sale of key components has a big catch in China.

It is true that Samsung's memory and display division earns money from every Chinese television. However, Samsung's new local strategy neglects the fact that Chinese manufacturers of televisions, screens and all these other things that Samsung no longer wants to offer there are rapidly becoming more and more innovative. Those who are no longer networked in this Chinese innovation ecosystem could soon be left behind globally in terms of technology. And then, in a few years' time, other markets may also come under pressure, in which Samsung will inevitably have to compete with the Chinese pushing into the global market. (sb)

International B2B Digital Marketing

China Digital Marketing: Strategies for Market Entry