Why does Samsung release the first wave of many of its products in the Mexican market?
Mainly because Mexico has been a key market for us for a long time thanks to the preference and loyalty of our users making us the number one brand in the country with 35% of the market share. In addition, Mexico is one of the few countries worldwide where this type of testing is done. Mexico is lucky to have an open market with many diverse products and brands. Concerning technology, it is one of the most competitive countries in the world where you find fans of any brand in almost any sector. The Mexican population invests in technology, and they will choose the best in the market. That is the main difference in Mexico compared to other countries.
Samsung Mexico grew by 16% in 2019. What factors helped to achieve this growth?
To grow in this industry, investing in innovation is key. Annually we invest around USD14 billion in R&D not only to keep our leadership but also to increase it. In 2019, Samsung presented a foldable smartphone, making us first brand in the country that had a commercially available foldable phone. We were also the first country to introduce Samsung Kids to the market, a service that provides streaming for children. We renewed Samsung Pay, a service that allows users to use their phone as a credit card to pay for services. Another key point was the wearables portfolio that, with a wider offer, helped us to grow in revenue. In addition, in the last two years we have opened 27 stores across the country. In e-commerce, we went from 0% to double-digits in 2019 with our online Samsung Store.
What will be your focus when it comes to diversification in 2020?
Our main priority is to position the brand differently in our distribution channels. We want our online and offline distribution channels to grow. The second is to grow with our business partners. We especially want to grow with financial tools through banks. Currently, car leasing is strong. Imagine doing this with cell phones. We are starting a program that allows our customers to trade their phones for newer models. It works almost like a membership for which you pay every 12 months to have the newest phone. These are the kinds of tools we are going to bring to the market. We want to help our Samsung lovers to experience our innovation immediately. We will have at least two or three financial tools with banks and partners so customers can change their phones every 12 months. That is our main strategy for 2021.
When are you launching your first 5G phone?
We have already launched our first 5G-ready phone, the Galaxy S20 Ultra, which was also the first 5G smartphone in Mexico. 5G networks will be up to 100 times faster than 4G networks but we are aware that the 5G revolution is not just about speed; it is about preparation for smart cities, smart cars, and smart homes. It is the preparation to do all types of businesses, houses, and smart industries that are expected to yield USD2.2 trillion in GDP worldwide according to a GSMA report. As an example, when you are using your phone with 5G, you are downloading or uploading information at a speed of about 1GB per second. It means that you are downloading almost one movie per second. This kind of speed prepares society for the making of a smart city. You will be able to see all traffic lights from a tablet or see how the subway works. City planners will also be able to control the lights, thereby lowering costs. This marks a new phase for Samsung, end-users, governments, countries, and the car industry. 5G is one of our priorities worldwide, and Mexico is part of this revolution.