In the mid 1990`s LG Electronics changed their focus from domestic Korean markets and targeted a growth strategy through export. Today, over 70% of LG white goods are exported to markets like China, the US and South Africa.
LG Electronics South Africa was established in 1997 and in its five year history the company has grown rapidly. From nowhere LG are the number one brand in South Africa for washing machines, air-conditioners, microwave ovens and monitors.
"The reason for our success has been simple, we believe that LG is a national brand in South Africa - supplying quality state of the art products at competitive prices. However the principle of running a profitable business remains," says YJ Khang, LG Electronics SA Managing director.
"LG`s has set a challenging real growth target of more than 40% for 2003, what makes this target even tougher is economists are predicting that household consumption expenditure will remain around 7,6% of total household spending. LG has achieved solid growth in a sideways market for the last five years and we believe that LG`s reputation for high quality goods have enabled the company to continue this path."
"In South Africa we compete in four distinct segments of the market, each one is very competitive. LG`s Consumer Brown Goods (our televisions, video and DVD players and of course an extensive range of home entertainment systems) are proving very popular and while most competitors have experience a reduction in sales in this sector LG sales are at an all time high. Major events like the World Summit, Fifa World Cup Soccer and the upcoming Cricket World Cup are contributing to these sales.
"Our white goods or kitchen appliance business entered a very competitive market and we have quickly established ourselves as a manufacturer of choice, South Africa will soon be introduced to the range of Internet enabled home appliances that are sure to redefine how people run their homes.
Khang continued to state that LG was recently recognised as the largest manufacturer of Air-conditioners worldwide for the third successive year. "In South Africa, LG air conditioners have quickly become the product of choice amongst specifiers and consumers; and finally the IT products business has expanded the range of computer equipment and are set to enter the notebook market in the new year.
"In 2002, LG entered the cellular business and are currently in the process of launching their range of hand sets in South Africa. A full range including entry-level products to a top of the range model that is equipped with a digital camera, colour screen and GPRS capability will be available before the end of the year. Internationally LG is poised to break into the top five cellular hand set manufacturers in 2003.
Khang added that this expansion has led LG to move office premise recently to a 26 000 square metre facility in the East Rand. "LG had simply outgrown the existing premise in Woodmead. We needed more office space, a larger warehouse and dedicated space for customer service. Our warehouse was bursting at the seams, as new products are introduced and as LG enters new market segments the need for further space was obvious.
Today, LG Electronics employs 150 people. All of these jobs have been created by the Korean multinational in the last 5 years.
Worldwide LG measures unaided brand awareness in the markets in which the company operates. In the Middle East and Africa unaided awareness of LG was a staggering 42,3%, in South Africa alone the figure is 48%, just four years ago the figure was a meager 14,1%. LG is second highest in the electronics sector in awareness terms in SA.
Khang concluded, "Innovative initiative like the Free Service campaign have heightened our company awareness. Our belief that LG products are reliable gave us the confidence to conduct daring market shaping activities like `Free Service`. The South African public have taken to LG products quickly and all indications are that nothing is set to change."
"And very soon we will start to leverage our position as the official global partner with the ICC 2003 Cricket World Cup which will further contribute to achieving our national brand positioning objective."
Share
Editorial contacts