[Financial Times]
Samsung Electronics and LG Electronics, the world’s largest television makers by sales, are enjoying growing global dominance as Japanese rivals dramatically shrink their operations. But they are encountering a challenge at home from unexpected quarters.
As flat-panel TVs have evolved from a luxury item into a relatively cheap, mainstream commodity, the two South Korean groups are facing competition from supermarket chains and online retailers selling lower-priced television sets with names such as “Dream View” and “Shocking TV”.
Faced with potential encroachment on their market share, Samsung and LG have been forced to adjust their strategy of focusing on the premium end of the market including 3D TV and internet-connected “smart TVs”. …
Though the Korean market accounts for less than 5 per cent of LG’s total TV shipments and under 3 per cent of Samsung’s, neither company can afford to ignore the rising popularity of budget TVs on their doorstep. …
The domestic price war started in October when E-Mart, South Korea’s biggest supermarket chain, rolled out a 32-inch full high-definition LED television set priced at Won499,000 ($443), more than 40 per cent cheaper than similar sets from traditionally dominant Samsung and LG. The TV, made by Taiwan’s TPV, was so popular with price-conscious consumers that 5,000 units sold in just three days. …
But growing competition, particularly from Chinese companies, has spurred Samsung to spin off its lossmaking LCD division as it refocuses on more lucrative next-generation organic light emitting diode displays. It has also forced restructuring at Japanese groups: Sony has shut some TV factories after enduring eight years of losses and abandoned a panel-making joint venture with Samsung, while Panasonic has nearly halved flat panel output. …