With Samsung Pay linking to Hong Kong’s Octopus card, world’s smartphone leader is looking beyond specs as Chinese phones pose larger threat
By providing the first mobile payment service that can be linked to the Octopus card, Samsung is showing its desire to cater to locals’ lifestyles. But is it enough for them to remain loyal when cheaper Chinese phones abound?
Samsung is still the leader in the smartphone market, but with increasingly intense competition from Chinese phonemakers – Huawei, for example, has now overtaken Apple to become the world’s second largest mobile phone brand in terms of shipments – the South Korean giant can no longer focus on specs alone, says one of the company’s Hong Kong-based senior executives.
Yiyin Zhao, head of IT and mobile communications at Samsung Hong Kong, agrees that Hongkongers have more spending power and much wider access to different phone brands, and thus making them among the hardest group of phone users to impress.
This was evident during last Thursday’s Hong Kong launch of the Samsung Galaxy Note 9. Zhao’s keynote speech was only a couple of minutes long and it barely touched on the handset’s impressive raw specs at all. Instead, the event focused on how the Note 9 fit into Samsung’s digital ecosystem, particularly Samsung Pay, the first and only mobile payment service that can be linked to Hong Kong’s predominant contactless stored value card, the Octopus card.
Zhao, who has been at Samsung Hong Kong since 2009, says the partnership between Samsung Hong Kong and Octopus, which was announced officially last December, had been years in the making.
“Everyone in Hong Kong uses Octopus,” Zhao says. “So it was important for us to build a localised service for Hongkongers. It has been a mutual partnership. I think Octopus chose us because of our ability to deliver advanced, user-friendly and secure features.”
But Zhao concedes that Hong Kong is a tough market due to the flood of Chinese handsets offering more for less. For example, Xiaomi announced last week a new handset with the exact same Snapdragon 845 processor as the Note 9, but priced at around HK$2,799 (US$360). The Note 9’s starting price is HK$7,698.
“If we wanted to just push technology [and specs] out, Samsung has the resources to do that,” Zhao says. “But for us it’s about meaningful innovation, and not just pushing [more specs] for the sake of it.”
She explains that Samsung Hong Kong has made a conscious effort in 2018 to promote a full lifestyle experience for Hongkongers. “It’s not just about hardware now,” she says.
That experience designed to “cater to Hongkongers’ lifestyle” is evident not just in the Octopus partnership, but also in the choice of Note 9 launch venue – a large pop-up store that doubles as a cafe in the heart of Causeway Bay.
“Previously, we had launched our phones at hotels,” Zhao says. “But with the Note 9 we wanted to give our fans something more personal.”
The 10,000 sq ft (930 square metre) pop-up space, named Samsung Cafe, opened its doors to the public on August 25 and will run until September 9.
In addition to serving coffee from local Hong Kong brand NOC Coffee and hosting illustration workshops with local artist Zoie Lam, the cafe has dedicated service booths that help Samsung customers set up Samsung Pay and the Smart Octopus system, as well as transfer data from an old phone to the Note 9 – if they make the purchase.
Ultimately, the pop-up store is Samsung trying to sell more phones. The Note 9 is an excellent premium device, but with aggressive competition from China, only time will tell if Hongkongers remain loyal.