Samsung Electronics and LG Electronics are set to change their marketing strategies with the world economy appearing to be entering a global recession, sparked by the coronavirus outbreak, industry officials said Thursday.
The world’s No.1 and No. 2 TV makers had planned to ride on the popularity of forthcoming mega sporting events such as the Tokyo Summer Olympics and the European Championship 2020 to see demand for their new TVs skyrocket.
But with the COVID-19 outbreak spreading across the world, the Union of European Football Associations postponed Euro 2020 until 2021. Also, speculation is mounting over the viability of the Tokyo Olympics.
However, industry officials say the impact of the possible cancellation of the Olympics won’t be significant to Samsung and LG’s TV business because the sporting events do not have as much impact as is commonly assumed.
“It is inevitable for Samsung and LG to change their marketing plans if there is a change in the Olympics schedule. But as big sports events only boost sales if there has been a broadcasting technology change ― for instance from high-definition to ultra-high-definition ― the effect will not be great on Samsung and LG.” an industry official familiar with the matter said.
“Even if there are no mega sporting events, Samsung and LG can strengthen their marketing by offering discounts on new products,” the official added.
Another industry official here said the crisis caused by the coronavirus can serve as an opportunity for Samsung and LG to bolster their market leaderships, adding they can still improve sales by expanding their online sales channels.
“Every crisis poses both a threat and an opportunity. Samsung and LG can cope with market uncertainties caused by the coronavirus and use it as an opportunity to solidify their leading positions,” the official, who asked not to be named, said.
“As people are advised to stay at home, TV has become a major entertainment tool for them. The longer people stay at home, the more time they will spend watching their TVs. Samsung and LG will expand their online sales channels for people who want to enjoy content with more color and detail.”
A Samsung official agreed that the company was in a precarious situation but added it will overcome the crisis by strengthening its technological capability.
Kim Hyun-suk, CEO of Samsung’s consumer electronics division, said Wednesday that the firm will solidify its No. 1 status this year by expanding into the premium TV market even though uncertainties surrounding the business are increasing.
“COVID-19 is subsiding in Korea but we don’t know exactly what impact it will have on our global distribution as it is just at the beginning globally. We will try to minimize any potential deficits,” Kim told shareholders.
“We are seeing increased demand for large-sized TVs and 8K resolution TVs. The 8K TV which will be launched this year offers pristine sound quality and an immersive viewing experience by minimizing the bezel width,” he added.
LG also recently launched its OLED TVs and NanoCell TVs worldwide. It also released the GX Gallery OLED TV, which is intended to be hung on the wall just like a picture.