Korean Media: 34-Year History Ends — Samsung Electronics to Exit China's Home Appliance and TV Markets!
On May 5, South Korean media outlet Chosun Ilbo published an article stating that Samsung Electronics has announced its exit from the Chinese home appliance and television business. The company entered the Chinese home appliance market in 1992, marking 34 years of presence. Analysts believe that due to intense competition from domestic Chinese enterprises, profitability in the home appliance sector has declined, prompting Samsung’s move toward a "selective and focused" strategy, shifting emphasis to mobile communications and semiconductors.
It is reported that Samsung Electronics has finalized its business restructuring plan in China and will announce it shortly. The core of this plan involves concentrating research and development, production, and investment on high-tech fields such as mobile devices and semiconductors. As a result, Samsung Electronics will cease selling home appliances and televisions in China. The home appliance factory located in Suzhou will be retained as a production base for export products. Samsung also plans to expand its operations in China, including launching the smartphone series “Heart to Heaven” tailored for the Chinese market, and developing AI technologies targeted at Chinese consumers.
Owing to declining profitability, Samsung Electronics is gradually exiting its home appliance business in China. Domestic Chinese appliance manufacturers have rapidly expanded their market share thanks to price advantages, and in recent years have significantly narrowed the technological gap in premium segments. Samsung Electronics holds a negligible market share in China. Furthermore, overall demand slowdown in the home appliance industry, tariff threats, and rising production and logistics costs have further intensified Samsung’s profit pressure.
Samsung Electronics has already initiated restructuring of its home appliance business, including closing certain production lines and shifting toward outsourcing. Recently, Samsung Electronics’ Digital Appliances Division held an employee management briefing, unveiling a business restructuring plan aimed at enhancing profitability. The company plans to re-evaluate the profitability of each product and gradually transition to outsourced manufacturing, focusing particularly on products with uncertain future prospects. Proposed strategies include retaining in-house production for high-value-added appliances such as washing machines, refrigerators, and air conditioners, while shifting production of dishwashers and microwave ovens to original equipment manufacturers (OEMs) or original design manufacturers (ODMs). Additionally, the company is considering shutting down its microwave oven manufacturing plant in Malaysia.
Original Source: toutiao.com/article/1864314300027913/
Disclaimer: This article represents the personal views of the author