Samsung has stopped the production of mobile phones in China because of the fierce battle with domestic competitors. China has the largest smartphone market in the world.

The "difficult decision" was taken to be able to work more efficiently, according to Samsung. The company continues to sell products in the country. It is not yet known where the production is moving. In recent years, Samsung expanded production in countries such as India and Vietnam, where the costs are lower.

The complete production shutdown in China follows earlier closures of Samsung factories at the end of 2018 and last June, which were also the result of fierce competition.

The South Korean tech giant is not the first player to stop production in China. For example, rising labor costs and slowing economic growth have already led Sony to relocate production to Thailand. Apple has not announced a move yet.

Samsung saw market share shrink considerably

Samsung's market share in China shrank to 1 percent in the first quarter of 2019, while this share was 15 percent in mid-2013. Fast-growing domestic brands such as Huawei and Xiaomi have caught up with the company in those years.

"In China, people are buying low-priced smartphones from domestic brands and advanced phones from Apple or Huawei. As a result, Samsung has little chance of winning a larger share," said a Cape Investment & Securities analyst.