Samsung Vs. LG
Samsung Electronics boosted its annual sales from 154.63 trillion won to 200.65 trillion won between 2010 and last year. During the same period, LG Electronics’ annual sales edged up to just 56.51 trillion won from 55.75 trillion won. Samsung Electronics achieved the rapid growth with its mobile phone and semiconductor businesses whereas LG Electronics went through hard times by failing to read trends in the global smart phone market.
Nevertheless, the story is quite different when it comes to consumer electronics. In this segment, LG Electronics is surpassing Samsung Electronics in both size and profitability.
Last year, the Home Entertainment (HE) and Home Appliance & Air Solution (H&A) Divisions of LG Electronics recorded 33.9302 trillion won in combined annual sales and 1.0388 trillion won in combined operating profits along with a profit-to-sales ratio of 3.1%. During the same period, the Consumer Electronics (CE) Division of Samsung Electronics posted 46.9 trillion won in sales and 1.25 trillion won in profits with a profit-to-sales ratio of 2.7%. The CE Division’s profit-to-sales ratio had been 3.3% in 2013, 0.3 percentage points higher than that of its counterpart in LG Electronics, but the former’s figure fell to 2.4% in 2014 while the latter’s rose to 3.1%.
The H&A Division, which supplies home appliances except for those produced by the HE Division such as TV sets, audio products and the like, attained a profit-to-sales ratio of as high as 5.9% last year by boosting its operating profit to a record high of approximately one trillion won. Its sales revenue amounted to 16.53 trillion won, exceeding that of the part of Samsung Electronics’ CE Division that is responsible for the same function by a margin of somewhere between 1.5 trillion won to 2.5 trillion won.
Samsung Electronics ranked first in the global TV market for 10 years in a row until last year but failed to do so in the consumer electronics market. According to market research firm TraQline’s Major 620 statistics covering the North American refrigerator, washing machine, drying machine, oven and dishwasher markets, Samsung Electronics accounted for 14.9% of the total last year to rank second behind Whirlpool by a margin of 1.5 percentage points. It has yet to catch up with the others like Miele in Europe, too. LG Electronics, in the meantime, has retained its top spot in the global washing machine market in terms of sales by brand since 2008 although it has never been the world’s largest electronics manufacturer.