Samsung Surpasses 'Electronics Industry Rival' LG After 4 Years

Last Year's CE Operating Profit 3.56 Trillion KRW... LG H&A and HE Exceed 3.3223 Trillion KRW

[Image source=Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Samsung Electronics has surpassed its 'electronics industry rival' LG Electronics in the integrated consumer electronics sector, which combines TVs and home appliances, for the first time in four years. Amid a sharp increase in home appliance sales for both companies due to the expansion of remote work caused by the COVID-19 pandemic and pent-up demand, TV performance appears to have been the deciding factor.

According to the Financial Supervisory Service's electronic disclosure system on the 1st, Samsung Electronics recorded an operating profit of 3.56 trillion KRW in the consumer electronics (CE) sector, which combines TVs and home appliances, last year, surpassing LG Electronics' operating profit of 3.3223 trillion KRW in the home appliance (H&A) and home entertainment (HE) sectors combined. This is the first time since 2016 that Samsung Electronics has earned more operating profit than LG Electronics in the integrated consumer electronics sector.

Looking at sales, Samsung Electronics recorded 48.17 trillion KRW in the CE sector last year, a 7.6% increase from the previous year. LG Electronics recorded 22.2691 trillion KRW (10.6% increase) in the H&A sector and 13.1798 trillion KRW (7.4% increase) in the HE sector last year, totaling 35.4489 trillion KRW. Although LG Electronics achieved record-high sales and operating profits in the H&A sector, the total integrated operating profit for all home appliances, including the HE sector, lagged behind Samsung Electronics by about 200 billion KRW.

The performance in the TV sector made both companies experience ups and downs. LG Electronics launched new home appliances such as clothing care devices, drum washing machines, and dryers, gaining an advantage in the home appliance sector and recording higher operating profits than Samsung Electronics for the past three years. In 2017?2018, Samsung Electronics' CE sector struggled, with operating profits trailing LG Electronics by more than 1 trillion KRW.

However, LG Electronics' TV sales led the H&A sector until 2016, but the situation reversed in 2017, with H&A sector sales (18.515 trillion KRW) surpassing HE sector sales (16.4331 trillion KRW), and the sales gap between the two sectors widened from 2.08 trillion KRW in 2017 to 9.08 trillion KRW last year. Operating profits were similar between the TV and home appliance sectors from 2016 to 2018, but last year, operating profit from home appliances exceeded that of TVs by 1.3829 trillion KRW.

For Samsung Electronics, the sales proportion of the video display (VD) division, including TVs, in the CE sector was about 60% in 2016 but decreased to 57.5% last year. However, Samsung Electronics appears to have taken the lead in operating profit due to its dominance in the TV market and notable growth in the home appliance sector, driven by the Bespoke series, which has gained popularity among young consumers such as newlyweds.

This year, the two companies are expected to compete in the TV market not only with existing QLED and OLED TVs but also with mini LED TVs, and continue their rivalry in the home appliance market with LG's steam appliances and Samsung's customized preference appliances, Bespoke.

This content was produced with the assistance of AI translation services.