Samsung Electronics is adjusting its handset distribution channels in China in order to enhance its control over pricing as well as market trends. Samsung has seen its share in China's smartphone sector drop to slightly over 10%, which is comparable to that held by Xiaomi Technology, Coolpad, Lenovo and Huawei.

Samsung is shifting to a fulfillment distribution (FD) approach to promote sales, under which the vendor will reduce its cooperation with large-scale sales agents, while tying up with small distributors under its control directly. In this way, Samsung is likely to squeeze out more profits, while enhancing its control over pricing and market trends.

However, some market sources indicated that Samsung should strengthen its e-commerce business in China since most China-based rivals including Xiaomi, Huawei, Coolpad and ZTE have been eager to promote sales online. Online sales currently account for 20% of total handsets sold in the China market.

Samsung should also roll out models with high price/performance ratios for different price segments, noted the sources.

Currently, Samsung only leads local brands in the CNY1,000-1,500 (US$163-245) and CNY3,000-3,500 segments, but lags behind Coolpad, Lenovo and Huawei in the CNY500-1,000 segment, behind Xiaomi in the CNY1,500-2,000 segment, and behind Vivo and Oppo in the CNY2,000-2,500 and CNY2,500-3,000 segment.