LG G6 gets off to good start

By Lee Min-hyung

Sales of LG Electronics’ premium G6 smartphone are getting off to a good start, with the nation’s most clandestine retailers voicing optimism over stronger-than-expected customer reactions.

Tech-savvy and price-sensitive smartphone users in Korea often rush to Techno Mart in Sindorim, southwestern Seoul, to buy new mobile phones, as the place is often dubbed the “shrine of illegal subsidies.”

Because of the super-cheap price ranges they offer, retail store clerks there are reluctant to reveal details over how they can offer such massive illegal subsidies.

For instance, the Galaxy S7 is on sale for only some 100,000 won ($89.37) at some stores there, lowering its price tag of 799,700 won for the 32GB model. Under the current telecom subsidy regulation, mobile carriers can offer up to 323,000 won in subsidies for Samsung’s flagship device, which means customers can get the phone for 476,700 won at the cheapest.

But the price reduction range is much steeper for the G6, as most Techno Mart retail stores offer more subsidies for the device whose price tag is 899,800 won. Depending on the mobile rate system, carriers can provide a maximum of 218,000 won in subsidies, allowing customers to get the phone for 681,800 won.

One retail store official offered 200,000 won for the G6 on a 24-month plan.

“Customers, looking for flagship Android smartphones are more likely to opt for the G6, as the device is up to date and comes with no striking downsides, compared with its predecessors ― including the G5 and the G4,” the store official said.

“It is true that people have negative stereotypes on LG smartphones over such issues as boot loop problems,” he said. “But the G6 is currently the only option for those seeking to buy the latest premium smartphone.”

The relatively narrow price gap between the G6 and the Galaxy S7 is another reason for the stronger-than-expected demand for the LG device, according to a manager from another retail shop.

“Even if Samsung boasts a more premium brand value, most customers stick to the latest model,” he said. Because there is only a 100,000 won price gap between the two models, most people go for the latest one, the G6, according to him.

Techno Mart as clandestine smartphone retailers

When asked how much popular smartphones ― such as the S7 and G6 ― are, almost all of the stores declined to give a direct answer. They, instead, showed the maximum price range they can offer by typing it on a calculator.

Some stores do not unveil smartphone prices to customers unless they answer one question: “What price did other stores offer you?”

If customers say “This is the first store I have visited,” some store managers give a suspicious look at the customers and end the conversation.

“Offering illegal subsidies is a target for paparazzi, so most retail stores remain defensive by speaking newly coined words to customers ― such as Galucky ― which refers to Galaxy S7,” a telecom industry source said. “Only those who can clearly follow up with what they say can get the opportunity to buy the cheapest smartphones.”

To root out the nation’s years-long illegal subsidies by mobile carriers, the Ministry of Science, ICT and Future Planning introduced the Mobile Device Distribution Improvement Act in October 2014.

To some extent, the regulation succeeded in curbing mobile carriers from offering excessive subsidies for customers, but these unfair practices remain prevalent online and at such clandestine retail stores as Techno Mart.

Earlier this year, the science ministry said it is considering not extending the controversial act amid a growing backlash from customers who argue it has only boosted the revenue of mobile carriers for the past two years.