Africa emerges as new key market for Samsung, LG
Wider range of products to be made available; familiarization efforts to be launched
By Kim Yoo-chul
The world's second-largest and second most-populous continent after Asia, Africa is the place to be for both Samsung Electronics and LG Electronics.
As they target Africa the two companies have been offering consumers there a broader range of home appliances conveniently available at a one-stop store.
Although they don’t openly talk about their objectives, sources say Samsung aims to boost its African sales by double digits.
``North America and Europe are still Samsung’s top concerns, but the firm is finding it imperative to pay attention to the African market and increase its market share,’’ a Samsung executive said.
In preparation to attain a bigger presence, LG has doubled the number of its affiliates in Africa.
Although long ignored by Korea Inc., Africa is now turning into a market that can’t be neglected because of its remarkable growth on top of its wealth of natural resources.
Africa is growing at an annual rate of 5 percent.
Reflecting this robust growth, African consumers have more disposable income and are showing signs of supporting a capitalistic market, officials said.
``Africa is becoming the next must-have market for electronics companies and emerging in importance following the BRIC nations (Brazil, Russia, India and China),’’ said Kwak Soo-jong, a senior economist from the Samsung Economic Research Institute (SERI).
Realignment
Korean firms have steadily been increasing their market presence in North American and European markets, where Samsung and LG earn a major portion of their overseas revenue over the last few years on the strength of competitive products and aggressive promotional campaigns.
Now attention is being focused on how Samsung and LG will apply strategies to fine-tune and localize products to make them more to the liking of African consumers.
Samsung Electronics Vice Chairman Choi Gee-sung said the world’s biggest technology company will make breakthroughs for faster and effective expansion in the region.
``Should Samsung grow by double digits in terms of sales, we won’t be satisfied,’’ said the top Samsung executive.
Samsung will hold a gathering of retailers, clients and media in May. During the event, its strategic products including 3D-ready smart televisions, Galaxy S smartphones and an upgraded tablet, the Galaxy S II, will be unveiled, according to Samsung officials.
``The main goal for this gathering is to strengthen the corporate image among African consumers and boost our technology leadership,’’ a Samsung spokesman said, adding its performance in Africa is crucial this year amid currency feuds between countries in anticipation of flattening market growth.
``Various corporate social responsibility (CSR) activities will also be launched,’’ said the spokesman.
Samsung runs the Samsung Electronics Engineering Academy (SEEA) to tackle the shortage of technical and engineering skills in South Africa.
The initiative is aimed at reaching out to the communities through education and skills development so as to bring in high-skilled, well-paying jobs for individuals, said Samsung Africa CSR head Ntutule Tshenye was quoted as saying.
LG has seven African affiliates from previously only four. It has a new legal entity in Algeria, Tunisia and the new affiliate in Nigeria will only handle customer policies.
LG spokesman Yoon Won-il said the world’s second-biggest flat-screen TV maker after Samsung aims to reap $2 billion in sales from the continent throughout this year from some $1.6 billion last year.
``The target is conservative,’’ Yoon added.
In the entire region, Samsung tripled its flat-screen TV market share to 40.5 percent last year from 12.4 percent in 2006, data from GfK showed.
LG was the leader in refrigerators, drum-washers and ovens with market shares of 21.7 percent, 40 percent and 33.7 percent respectively by revenue in 2010, the market research firm reported.