SEOUL, KOREA - Korea’s major electronics companies such as Samsung Electronics and LG Electronics are facing difficulty in increasing their presence in China.
Their combined market share in the Chinese market fell to below 5 percent as local companies, which focused on low-priced items, are catching up with technological front-runners at a rapid pace. Worse yet, an alarm bell is ringing loudly for Korea’s electronics companies as the Chinese government announced a plan to foster five to eight global-scale electronics companies among local companies.
Samsung and LG plan to increase their market share in China by expanding their own distribution networks toward mid- and small-sized cities. This plan, however, cost a huge amount of investment.
The two Korean companies enjoyed their heydays in China until the 1990s with their market share in some items, including refrigerators and washing machine rising to over 20 percent.
From the 2000s, however, the rule of game has changed. A huge number of local companies churned out cheap electronics items at a price that is equivalent to 50-80 percent of those of Samsung and LG.
enews@hankyung.com
*Article provided by The Korea Economic Daily
