’Half-priced’ televisions pinch Samsung, LG
By Kim Yoo-chul
Samsung Electronics and LG Electronics have a common problem — half-priced TVs.
Retailers are offering more of these televisions after the nation’s biggest retailer E-Mart sold 5,000 32-inch TVs priced at 430,000 won within two days after they were launched in October last year.
The limited-offer TVs featured cheaper flat-screens procured from Taiwanese firms, but had lower-quality displays — B-rated and even C-rated from spot markets — officials familiar with the situation said. They offer only basic functions and do not provide USB connections or 3D functionality.
Impressed by E-Mart’s feat, HomePlus and on-line shopping malls Auction, GS Shop and 11th Street are offering low-priced TVs for between 449,000 and 499,000 won.
Already, 2,000 32-inch sets introduced by 11th Street priced at 449,000 won — a 20 percent discount of the same model offered by Samsung and LG Electronics — were sold out within a day. Now, E-Mart is preparing to release a discounted 40-inch TV.
“We had expected the popularity of the half-priced TVs would be short-lived. We were wrong. Attracted by better pricing, more consumers are flocking to buy such televisions,” said a Samsung Electronics official, Friday.
“I’ve heard that Samsung and LG are charging more to consumers with feature- and tech-upgraded factors. But better pricing is the deciding factor for me when choosing a new TV,” said Hwang Hae-jin, who recently bought 11th Street’s 32-inch TV.
Analysts and company officials say the demand for such basic televisions will rise throughout the year due to the termination of analog TV services. Consumers seem intent to replace their analog TV sets with the basic digital TVs, they added.
“My request is simple. Big TV makers are trying to charge consumers more by adding unnecessary functions. They have to go back to the basics. Good viewing quality and better pricing,” said Kim Sang-su, a 34-year-old office worker in Seoul.
Samsung and LG, which dominate Korea’s TV market, aren’t happy to see the meteoric rise of lower priced models.
The TV titans wrote off the popularity of the basic sets saying it was a “one-time frenzy” and were unconvinced that they would emerge as a new trend.
“If there is a market, then we will see,” said Yoon Boo-keun, president of Samsung’s television division. Samsung plans to introduce a basic 32-inch LCD TV for around 500,000 won this year.
That seems a difficult decision for the company. It said TV prices were falling about 30 percent every year, pushing it to sell more premium products such as smart voice-recognition models.
“Should LG change its strategy after seeing the steady demand for low-end TV? LG will release TVs equipped with simple functions at better prices,” said a senior LG executive.
For LG, this is a major policy shift just a few months after its television chief Kwon Hee-won told reporters that the quality of the basic TVs was “very low.”
“I’ve bought 11th Street’s 37-inch TV recently. But the product was delivered without an instruction manual. Also, when I turn on the TV, I heard strange noises,” said one consumer.
Park Ji-na, a spokeswoman for SK Planet, which operates 11th Street, just reiterated that the rate of consumer satisfaction of its basic televisions has reached 94 percent, adding the company hasn’t had any negative reports.