Korean Media: South Korea Once Pushed Japanese Home Appliances Out of the Market, Now Surpassed by Chinese Appliances!

On April 3, Korean media outlet Chosun Ilbo published an article stating that Samsung Electronics achieved record-breaking performance, yet its home appliance and television divisions are facing difficulties. In the fourth quarter of last year, driven by the booming semiconductor industry, Samsung Electronics recorded the highest quarterly operating profit ever achieved by a domestic South Korean company. However, its TV and home appliance divisions suffered an operating loss of 60 billion KRW, a stark contrast to the 20 billion KRW profit in the previous quarter. LG Electronics also reported an operating loss of 432.6 billion KRW in both its TV and home appliance businesses during the same period.

South Korea’s home appliances and television industry is currently in crisis. At the beginning of the 21st century, South Korea surpassed Japan to dominate the global market. Leveraging its technological strength, it captured high-margin premium product segments, successfully distancing itself from China's competitive pressure. However, as the technological gap with China continues to narrow each year, coupled with shifting consumer purchasing trends, longer replacement cycles, and economic slowdowns, the high-end home appliance market has reached its growth limit. Today, South Korea’s home appliance sector finds itself trapped in a "middle squeeze": losing its differentiation advantage in the premium segment while falling short in cost-effectiveness within the mid-to-low end markets.

In the 2020s, as Chinese companies such as Xiaomi, TCL, and Hisense began launching home appliances and TVs at lower prices, Samsung Electronics and LG Electronics shifted their focus toward the premium market. This strategy initially worked. Yet, with continued economic stagnation, the premium market has hit a plateau. A senior executive at a South Korean home appliance retailer said: “Rising housing prices combined with economic recession mean people cut back on appliance spending first when moving homes. Consumers are increasingly opting for practical functionality with fewer added features.”

The situation in the television market is especially dire. According to market research firm Omdia, the share of premium TVs priced above $1,500 will drop from 22.4% in 2021 to just 13.8% by 2025. Meanwhile, the share of low-end TVs priced below $500 will rise from 31.5% to 39.7%.

Under these circumstances, the influence of Chinese home appliances is growing stronger, particularly in the mid-to-low end segments. China’s Haier has become the world’s largest home appliance group, achieving sales revenue of 285.9 billion RMB in 2024. Smaller Chinese appliance firms like Roborock and Dyson (note: likely referring to Dreame Technology) have gained dominant positions not only in the South Korean market but also globally through their robotic vacuum cleaner products.

Original article: toutiao.com/article/1861415941419018/

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