Korean giants grow market share

20 August 2009

SEOUL: South Korean giants Samsung, LG Electronics and car maker Hyundai are winning bigger shares of world markets boosted by a cheap currency (the won), differentiated products and cost-effectiveness.

"The weak won and manufacturers' competitive edge are the two drivers for their robust performance," according to a recent report by Moody's Investors Service.

Samsung has reported its highest quarterly profit in two years on soaring sales of mobile phones and flat-panel TV sets.

In mobile handsets it has increased its global market share to 19.2% in the second quarter of 2009 from 15.4% according to researchers Strategy Analytics.

Its touch-screen smartphones are winning share from the likes of one-time world leader Motorola and Sony Ericcson, which have been slower to produce smartphone products.

In flat-panel TV sets Samsung, which remains the world leader with 21.5% of the market, and LG have continued to make headway against Japanese rivals Sony and Sharp which have been hit by the strength of the yen and have recently recorded losses.

Hyundai Motor has also posted record quarterly profits thanks to its strength in competitively-priced compact cars.

Its models have benefited from the various 'cash for clunkers' schemes in operation in the US and Europe and also from perceived improvements in product quality, aided by effective marketing. Its worldwide market share has grown from 4% last year to 5% in 2009.

The won has recently rebounded by 20% against the dollar but South Korea's second quarter exports still grew by 14.7% compared to the same period last year.

But analysts expect the country's major companies to hang on to most of their gains. According to Yun Seok, head of research in the region for Credit Suisse, "Korean IT companies have continued to spend aggressively over the past three to four years while their rivals in Japan, Taiwan and Europe could not, due to their impaired balance sheets. Now that is bearing fruit."

Data sourced from FT; additional content by WARC staff