Samsung Electronics and LG Electronics are actively working to revitalize their home appliance businesses, which are currently facing slowdowns. Both South Korean giants are changing their strategies to regain ground lost to increasingly competitive Chinese rivals.
Samsung Electronics announced Monday that Lee Won-jin, its global chief marketing officer, is now the new head of the company’s Visual Display (VD) business. This division handles TVs and other display-related operations. Lee replaces Yong Seok-woo, who led the business since November 2023 and will now advise Roh Tae-moon, head of Samsung’s Device Experience division.
Lee, a specialist in marketing and software services, joined Samsung in 2013 from Google. He is credited with successfully launching Samsung TV Plus, a free ad-supported streaming service. This move helped Samsung shift from a device-focused company to one that also offers platform-based services.
Samsung stated in a press release, “Drawing on his track record of business success and market insight, he is expected to spearhead business turnarounds and identify new growth areas, thereby further strengthening the competitiveness of the visual display business.” This appointment is unusual because Samsung usually shuffles management in December, showing an urgent need to tackle challenges from Chinese rivals in the TV market.
Samsung Electronics’ TV and home appliance businesses have reported disappointing earnings recently. The VD and home appliance divisions recorded operating losses of 100 billion won ($67.9 million) and 600 billion won in the third and fourth quarters of last year, respectively. While they returned to a 200 billion won operating profit in the first quarter of this year, this isn’t a clear sign of recovery, as similar ups and downs have occurred in recent years.
To combat this, Samsung is focusing on streamlining its operations. The company plans to prioritize premium products and outsource the production of lower-margin items like dishwashers and microwave ovens to outside manufacturers. They will continue to produce higher-margin goods such as refrigerators and washing machines in-house.
Additionally, Samsung is reportedly considering shutting down its Malaysia plant, a key overseas production hub since 1989. There are also reports about potentially stopping sales of home appliances and TVs in China, though Samsung has not confirmed this officially.
Instead, Samsung’s VD business will double down on high-margin products like artificial intelligence (AI) TVs and boost its services and operating system businesses. The home appliance division will focus on making more profit by selling premium products and securing more orders for AI data center heating, ventilation, and air conditioning systems.
During its earnings call on April 30, Samsung noted, “Profitability is coming under pressure amid intensifying global competition, as well as tariffs and broader geopolitical risks.” The company added, “We are restructuring our business by focusing on core operations, while exploring various options to diversify our revenue streams. More concrete plans will be shared with the market once finalized.”
Meanwhile, LG Electronics also saw solid earnings from its home appliance and TV businesses in the first quarter. However, it too faces growing challenges from ongoing geopolitical tensions and Chinese competitors who are catching up through cost efficiency.
To address these issues, LG Electronics plans to globalize its production. During its April 29 earnings call, the company said it would “leverage manufacturing ecosystems in low-cost countries to build a cost structure competitive with Chinese rivals.”
Beyond cost, LG plans to focus on areas where it has a strong advantage, particularly in business-to-business operations and home appliance subscriptions. Since LG doesn’t have steady money-makers like Samsung’s memory and semiconductor businesses, the company is also developing future growth areas like robots and data center chillers. They plan to start mass producing robot parts in the first half of the year and expect to reach 1 trillion won in revenue from data center chillers sooner than expected.
