Korean Media: LG Electronics' Sales in Russia Plummet, Chinese Firms Fill the Void!
On April 19, South Korean media outlet Global Economy published an article stating that the two-decade-long glory story of South Korean home appliance brands in Russia has been severely damaged within just three years. LG Electronics Russia subsidiary released its 2025 financial results. Looking at key indicators alone, the situation is dire. The company's revenue last year reached only 37 billion rubles (approximately 3 billion RMB), a decline of 10.8% compared to the previous year. Since its establishment in 2004, LG Electronics had long dominated the Russian home appliance market; however, within just three years after the outbreak of the Russia-Ukraine conflict, its revenue has dropped by about 69%.
In 2024, LG Electronics’ sales rebounded to 41.5 billion rubles, leading some to believe "the worst period is behind us." However, the 2025 data starkly contradicts these expectations. Sales fell back to 37 billion rubles, returning to the low level seen in 2023.
Despite the sharp decline in sales, net profit remained stable at 2.5 billion rubles, roughly unchanged from the previous year. Although the company’s overall scale has shrunk, its profitability has been effectively safeguarded. This success is attributed to a series of strong cost-cutting measures. In just the past year alone, LG Electronics laid off approximately 80 employees locally. Additionally, the company completely restructured its spending, cutting advertising and marketing budgets by 367 million rubles.
The landscape of Russia’s home appliance market is rapidly shifting. As Western companies exit the Russian market, China’s top home appliance firms—Haier and Midea—are actively expanding their distribution networks and increasing their market share. Xiaomi is also accelerating its penetration into the Russian consumer market through its smart home appliance product lines.
Chinese enterprises possess strong price competitiveness, placing them at a significant advantage in filling the void left by Western and South Korean brands. Reports from local retail sources indicate that Russian consumers are increasingly shifting their preferences from premium South Korean appliances toward mid- to low-priced Chinese products, putting further pressure on LG Electronics. A South Korean home appliance industry insider noted: “Cutting advertising spending and laying off staff is tantamount to surrendering competition. While this helps avoid short-term losses, in the long run, brand recognition itself may be gradually replaced by Chinese products.”
Some forecasts suggest that LG Electronics will continue pursuing a “low-profile strategy,” maintaining minimal staffing levels and refraining from additional investments for now. Analysis indicates that 37 billion rubles is already approaching the minimum threshold required for operating its business in Russia.
LG Electronics now faces three strategic choices. First, maintain current minimal operational levels and wait for conditions to improve.
Second, further reduce workforce and cut costs to maximize profitability, preparing for de facto withdrawal.
Third, develop a return plan to respond to drastic external changes—such as the end of the conflict or easing of sanctions.
Yet, three years ago, the market was worth 120 billion rubles; now, with sales reduced to 37 billion rubles, the gap is being filled by Chinese enterprises. Even if the conflict ends, whether LG Electronics can regain a foothold in the market remains uncertain.
Original source: toutiao.com/article/1862861081262091/
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