Samsung Electronics has initiated a strategic downsizing of its smartphone business in China, following its earlier exit from the home appliance market, according to industry sources.
Stores failing to generate monthly sales of 300,000 yuan (approximately $41,500) will be gradually phased out, a person familiar with the matter told a news outlet. This move comes as part of a broader effort to streamline costs and improve efficiency.
In May 2025, Samsung Electronics announced its withdrawal from China's home appliance sector, citing a need to adapt to rapidly changing market conditions. The company stated it would cease sales of all home appliances, including televisions and monitors, in the mainland market. At that time, Samsung confirmed that its semiconductor (memory), mobile terminal (smartphone), and medical device businesses would continue operating normally.
However, Samsung's smartphone presence in China remains precarious. According to data from IDC for the second quarter of 2026, Samsung's market share in China has plummeted to just 0.1%, down from 0.4% during the same period last year. This represents a staggering 60.8% year-on-year decline in shipment volume.
Compounding these challenges, Samsung Electronics' recently released second-quarter financial report showed that while revenue and operating profit reached record highs for a third consecutive quarter, its Mobile eXperience (MX) division reported an operating loss of 0.7 trillion Korean won. This marks the first time the company's mobile phone business has recorded a loss.
In response, Samsung is aggressively cutting costs by closing underperforming stores and reducing staff in China. According to an incomplete tally, recently shuttered stores are located in cities including Shenzhen, Fuzhou, Zhengzhou, Xi'an, Kunming, and Hefei.
A store employee revealed that the company has set a monthly sales target of 300,000 yuan, with both stores and employees failing to meet this threshold facing removal. Given Samsung's current minimal market share in China, hitting this sales target presents a significant challenge.
Samsung did not respond to inquiries regarding the store closures and its future development strategy in China as of the time of publication.