Samsung, LG seek to spur demand for premium appliances at IFA

LG Electronics' flexible OLED signage displays form a waterfall at the company's booth during the IFA fair in Berlin, Sept. 5, 2019. The annual IT exhibition, which was held online in 2021 amid the COVID-19 pandemic, will take place offline from Sept. 2 to 6 in the German capital

Europe-focused exhibition returns offline in Sept.

By Baek Byung-yeul

Samsung Electronics and LG Electronics are seeking to strengthen their grip on the premium home appliance market as the country's two leading tech companies will take part in this year's IFA 2022 to use the tech fair as an opportunity to appeal to high-income European consumers, according to companies and industry officials, Monday.

The IFA event, one of the largest tech fairs in the world along with the Consumer Electronics Show in the United States and the Mobile World Congress in Spain, was not held in 2021 amid the Delta wave of the coronavirus pandemic. This year, despite the current Omicron surge, the annual show will return to an offline version from Sept 2 to 6.

They said the IFA trade show will be a good opportunity for companies such as Samsung and LG that sell tech products to meet local buyers and general consumers in Europe.

During the earlier part of the pandemic, Samsung and LG enjoyed explosive demand for their TVs and home appliances as many Koreans stayed home. But as time as gone by, demand for new devices decreased in the country, and the two Korean tech firms see that the IFA will play a role in marketing high-priced products to European consumers, they added.

"As demand for TVs and home appliances, which increased significantly due to the COVID-19, is now decreasing. In this situation, Samsung and LG will compete more fiercely to promote their premium products at the IFA trade fair," an official from a local IT company said.

Both Samsung and LG struggled with decreased demand in the second quarter.

Samsung announced that its home appliance and TV business saw its sales increase to 14.83 trillion won ($11.37 billion) in the second quarter, but its operating profit was at 360 billion won, a 67-percent decrease from a year ago.

LG's TV business also posted sales of 3.45 trillion won, but it saw an operating loss of 18.9 billion won.

The official said the IFA will be one of the big events for the two companies to step up their promotional activities along with the upcoming FIFA World Cup, scheduled to be held from Nov. 21 to Dec. 18, and seasonal discount events such as Black Friday in November and Boxing Day in December.

"The demand for home appliances is slowing overall, but high-priced products from Samsung and LG are gaining market control. When the market situation is not good, sales of low-priced products are mostly affected, but the demand for high-priced products usually remains strong," the official said.

"Unlike the Consumer Electronics Show, where companies try to come up with new technologies that are not available now, the IFA trade fair features products that will be soon launched in the market or are already on sale. So, companies participating in the fair will have more opportunities to meet with buyers and these meetings will work as momentum for the Korean tech companies to increase their sales of premium devices," she added.

A Samsung spokesperson said, "The company has not decided yet about what kinds of products and technologies it will bring to the IFA fair," but the industry view is that the tech giant is expected to showcase various IT devices, such as home appliances from its Bespoke brand, Galaxy foldable smartphones and new TVs, at the trade show.

An LG spokesman said the company "is expected to showcase its premium home appliances such as from its Objet lineup, artificial intelligence technology-featuring LG ThinQ platform and new TVs that fit changed lifestyles," adding that the company has not completely fixed what it will display during the event.

Visitors try out Samsung Electronics' IT devices during the IFA fair in Berlin, Sept. 5, 2019. Korea Times photo by Baek Byung-yeul

Korean firms take IFA as breakthrough in Europe

Not only Samsung and LG, but also around 130 companies are expected to join the IFA fair, as they believe the trade show will become precious momentum to rebuild sales channels that had not been in smooth due to the pandemic.

If all 130 companies participate in the upcoming event, the scale will be much larger than the 2019 event, in which a total of 91 companies and state-run agencies participated in the tech fair.

In 2020, the year the pandemic began, the event organizer held the IFA fair in a hybrid online and offline format, but around 100 companies actually established their promotional booths at the fair. Korean companies' willingness to participate in this year's event seems stronger than ever as organizers even cancelled the event itself in 2021.

"Due to the long-term pandemic and supply chain issues that adversely affected various industries all over the world, Korean companies had fewer opportunities to show their products in direct contact with European buyers," another industry official from a local ICT industry said on condition of anonymity.

"The event will become an opportunity for them to promote their services, technologies and products in front of buyers there and secure new sales channels," the official added.