Slump Even in Peak Season... Two Threats to the Korean TV Market

Persistent Demand Slump
Q4 TV Shipments Forecasted at 60.46 Million Units

Chinese Companies Intensify Korean Market Entry
TCL Establishes Korean Subsidiary... Aggressive Pricing on Large-Sized TVs

Samsung and LG Electronics Strengthen Marketing... Inventory Clearance

The outlook is bleak for domestic TV manufacturers entering the year-end peak season. Although the fourth quarter is traditionally considered the peak season for TVs, demand continues to decline due to the global economic downturn, and Chinese companies have begun aggressively targeting the Korean market. Samsung Electronics and LG Electronics are expected to focus on securing profitability by lowering selling prices and strengthening marketing efforts until the first half of next year, when global TV demand is projected to recover.

On the 21st, industry insiders forecast that TV demand will remain sluggish in the second half of this year as well, amid increased macroeconomic uncertainties such as the Russia-Ukraine war. Market research firm Omdia estimated the global TV shipments for this year at 203.51 million units (▲1Q 46.85 million units ▲2Q 45.85 million units ▲3Q 50.35 million units ▲4Q 60.46 million units). Although this is slightly higher than last year's shipments of 203.27 million units, it is still insufficient to say that demand has fully recovered.

LG SIGNATURE OLED M.
[Photo by LG Electronics]

LG Electronics also stated during a conference call following its third-quarter earnings announcement that "OLED TV sales this year are expected to decline compared to the previous year." The company explained, "Business uncertainties persist due to not only the global demand slowdown this year but also increased geopolitical risks in Europe, the main market for OLED TVs," adding, "Both entry-level and premium product demand are being affected by the economic slowdown."

As TV demand recovery slows, high panel prices are becoming a burden. LCD TV panel prices hit an all-time low in September last year and remained sluggish but have been steadily rising since February this year. This creates a vicious cycle where TV manufacturers face increased cost burdens because it is difficult to fully reflect the panel price increases in TV selling prices.

Moreover, Chinese companies such as TCL and Hisense are rapidly increasing shipments by leveraging price competitiveness, quickly catching up with domestic companies. In particular, TCL sold 23.78 million TVs last year, ranking second in the world with an 11.7% market share by shipment volume. Although it lags behind Korean companies in terms of revenue, TCL has caught up with LG Electronics (11.7%) in shipment volume and is closing in on Samsung Electronics (19.6%).

Recently, TCL has established a Korean subsidiary and opened an official store on Naver, marking a full-scale entry into the Korean market. Until now, TCL products were sold in Korea through direct imports by distributors, but TCL plans to increase market share by providing installation and after-sales services through the Naver Smart Store.

Samsung Electronics is offering the 2023 Neo (NEO) QLED 8K, originally priced in the 5 million KRW range, at a discounted price in the 3 million KRW range through the 'Samsung TV Super Big Festa.'
[Photo by Samsung Electronics website capture]

TCL is also aggressively competing with low prices in the large-screen TV segment dominated by Samsung Electronics and LG Electronics, putting domestic companies in a position where they cannot simply stand by. Samsung Electronics and LG Electronics have already lowered TV selling prices. According to their third-quarter quarterly reports this year, the average selling prices of TVs for Samsung Electronics and LG Electronics fell by 3% and 7.7%, respectively, compared to the previous year.

In this market environment, the two companies are strengthening marketing efforts to clear inventory and enhance profitability. Samsung Electronics is holding the 'Samsung Week Black Friday' event, where customers can purchase two types of QLED 4K TVs and the lifestyle TV 'The Serif' at up to 40% off, as well as the 'Samsung TV Super Big Festa,' offering discounts on one NEO QLED 8K model and six QLED 4K models.

LG Electronics celebrated the LG Twins' Korean Series victory by offering a 29% discount on some products, including 500 units of four OLED TV models, symbolizing the significance of the first championship in 29 years. LG Electronics is also running an event where members who sign up for the LG online brand shop and participate in a roulette event can win prizes daily for 290 people, including LG Gram laptops, Tiiun Mini air purifiers, 290,000 KRW discount coupons, and 29,000 KRW membership points.

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