Cutthroat Competition
Samsung Electronics and LG Electronics are carrying on cutthroat competition in the home appliance market, especially premium product market. Premium products, which account for only 10 percent of the total, takes up 30 to 40 percent of the total revenues.
The two companies has launched new products integrated with their technologies every year, but they show desperation and tenaciousness not to miss out price, technology and idea this year. This is largely due to the fact that every single product represents the company as the price of premium home appliances is recently as much as a compact car. In addition, artificial intelligence (AI) has joined the trend and the home appliance market has become the battlefield of the two companies’ latest technologies.
First, Samsung Electronics and LG Electronics target VIP customers with their own differentiated strategy in terms of price. Unlike LG Electronics which has a separate brand dubbed “LG Signature,” Samsung Electronics is carrying out ultra-high price marketing campaigns by naming its products with the best specifications by product group as “Chef Collection” and “QLED TV.” The company recently released its high-end refrigerator made with porcelain materials dubbed “Chef Collection Porcelain” for the first time in the industry with a price tag of 14.99 million won (US$13,201). The new model is about 4 million won (US$3,523) more expensive than its lower model “Chef Collection Family Hub,” aiming to create new demand only for VVIP customers.
LG Electronics is attracting attention from rich consumers around the world with its ultra-premium brand LG Signature. The company stresses a special value that only a few can enjoy, targeting high-end department stores and hotels overseas. Before the rollout of LG Signature in the Middle Eastern market scheduled in August, LG Electronics has filled the whole royal suite room at a high-end hotel in Dubai with LG Signature products. The company introduced its 77-inch LG Signature OLED TV W, which is priced at 33 million won (US$29,037), refrigerators and washing machines which are twice as expensive as general models at once.
The two companies are also competing in technology and idea with decades of expertise. As LG Electronics’ Twin Wash washing machine, which has a drum washing machine on the top and TongDoLi washing machine on the bottom, became a huge hit, Samsung Electronics launched Flex Wash washing machine, which as TongDoLi washing machine on the top and drum washing machine on the top with three doors. LG Electronics teamed up with professional cardstacker Bryan Berg to demonstrate that its new Centum System washing machine significantly reduced noise and vibrations. He stacked cards on top of the washing machine, while it was running at 1,000 RPM. On the other hand, Samsung Electronics’ AddWash attaches a small window on the main door, which can open widely when consumers have extra clothing during the wash. For air conditioner which sells well in summer, Samsung released “Wind Free Air Conditioner,” while LG Electronics launched “Whisen Dual Air Conditioner,” which lowers indoor temperatures with the help of innovative technology that cuts down on the actual breeze coming from the unit.
The intense competition has been gradually expanding to the cutting edge information communication technology (ICT) in order to dominate Hyper Connected Society based on the Internet of Things (IoT) in advance. Samsung Electronics installed its AI assistant Bixby in its refrigerators and will expand the service to all home appliances. Based on the partnership with Google, LG Electronics is forming an alliance that fights against Samsung Electronics. An official from the electronics industry said, “Heralding the era of Fourth Industrial Revolution, the competition in home appliances, which will determine the fate of the two companies, is growing more intense.”