2023-06-08 19:03:00
According to stock market figures, Samsung electronics despite the sluggish economic environment, it maintains its number 1 position in the global television market. Even if resilience seems to be there, the context of crisis is being felt. However, the symbol of South Korea, which has made its mark over time, is trying to get back on its feet. Between resilience and innovation, the Tech giant is in full revival.
The year is 1938. Lee Byung-chul, a South Korean entrepreneur, founds a trading company called Samsung not far, according to the archives, from the city of Daegu, without suspecting that this small textile company would dominate much of the world. global market. It was around 1947, after the Second World War, that it took advantage of South Korea’s economic growth to significantly expand its business niches. It thus becomes a major player in building, public works, civil engineering, shipbuilding and consumer electronics. More specifically, it was in 1969 that Samsung launched into the electronics sector, via the company Samsung Electric Industries, still created under the leadership of Lee Byung-chul. A successful bet, since just after the acquisition of the companies Sanyo and Hanguk Jeonja Tongsin, the group at the time headed by the same Lee Byung-chul recorded exponential growth internationally. A few decades later, it is difficult to miss Samsung, whose name appears on more and more products around the world. However, even if over the years the group has been able to plant its influence in the global economic landscape, it is not immune to the negative externalities of economic life. The Covid crisis, the war in Ukraine and the energy crisis which plunged the world into a veritable inflationary spiral, not to mention the significant drop in household purchasing power, have impacted the group’s economic health in many ways.
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According to its website dedicated to the publication of its news, the group reveals that it saw its profits plunge by 96% in the first three months of the year 2023, to reach 600 billion won (450 million dollars ) from 14.12 trillion won ($10.6 billion) a year earlier. It is indeed his worst profits since the financial crisis of 2008. He also explains that he was able to count on his smartphone division to limit the breakage, with in particular the launch of the Galaxy S23. It sold 11 million units of this line of phones in the first quarter, up 50% from the S22 series. Samsung attributes the drop in demand to the weak global economy causing customers to slow down their purchases. However, even if the context of its activity seems to be impacted by the economic situation, the giant has been able to maintain its leadership in certain niches. This is the case for televisions, where it retains its number 1 position on the world market.
On a discovery mission in the mysteries of the group, in particular in its headquarters in the Middle East and North Africa (MENA) region, Mustafa Sadick, Head of Visual Display Group at Samsung Electronics MENA, reassures us by explaining to us that “the economic landscape of the region remains solid – a PwC report concludes that the GCC economies are set to see their strongest growth in a decade compared to the majority of countries in the world. However, given today’s cautious consumer spending habits, it is crucial for brands to demonstrate impeccable quality and long-term sustainability.
Historically, these brands have managed to thrive in such environments. It is therefore with justified optimism that we view our performance this year and beyond. Televisions occupy an essential place in homes and it is obvious that consumers attach great importance to their acquisition. With the quality of Samsung TVs and our vast entertainment ecosystem, our brand is top of mind for families when considering a TV purchase.” And to clarify that “Omdia’s report revealed that Samsung dominated the global ultra-wide TV market segment in 2022, with a market share of 36.1% and 42.9% for TVs over 75 and 80 inches, respectively. For the high-end TV market priced above $2,500, Samsung retained the largest market share by revenue at 48.6%. In times of global recession, consumers are more critical in their purchasing decisions and invest above all in quality”.
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As a reminder, this is not the group’s first blow. During the 1990s, Samsung suffered the consequences of a wave of campaigns to smear the quality of its mobile phones, which damaged its reputation. Faced with this, the group at the time under the leadership of Lee Kun-hee, the son and successor of the founder Lee Byung-chul, operated a profound strategic repositioning. Today, even if the context is different, the group remains attached to its values of resilience and innovation in terms of management and especially technology, which are both the fuel and the compass of the group when swimming in troubled waters.
In recovery mode…
“It is in the MENA region that we see the demand increasing. Countries have very fast Internet connection, universal fiber optic connectivity and a tech-savvy population, all of which are essential conditions to take full advantage of the cutting-edge features of our televisions,” argues Sadick from the Economic Recovery Hub of the MENA region. And to continue: “The population of the MENA region is historically receptive to bold new ideas and has a very global vision. The retail industry has matured and is making it easier for customers to access products and services, as evidenced by our online store.”
It should also be noted that in this recovery period, the group remains faithful to its secret formula, in particular the “innovation” lever. Its latest “smarthing” technology, which is revolutionizing the interior of our homes, and its latest TV innovations, which offer users unique experiences, are making a difference in this context of economic crisis. “We see brands investing in innovative solutions that create impact. Recently, at CES 2023, Samsung previewed a new TV mode intended to help people with weak or limited vision. This feature, called Relumino, incorporates layers of camera technology that emphasize edges, sharpen contrast and enhance colors, resulting in an easier-to-see image.
The Samsung approach
“Globally and regionally, we are seeing consumers being more discerning in their buying decisions and investing in quality above all else. They will prioritize buying from brands that they believe are high quality, reliable and ready for the future,” reveals Sadick. Recall that the global consumer electronics market in the Gulf is booming, with annual growth of more than 10% over the next five years. “The high-end TV market is growing even faster and will continue to grow as more innovations and models are available to consumers.”
Smartphone, the numbers in free fall in Africa
According to the International Data Corporation (IDC), the African smartphone market shrank by 18% in 2022 compared to the previous year. A total of 73.4 million units were sold in Africa, with South Korean Samsung and Chinese brands Tecno and Itel accounting for 65% of overall sales. Devices costing less than $200 accounted for 82% of total smartphone sales. In a statement to TechCrunch earlier this year, Ramazan Yavuz, senior research director at IDC Middle East and Africa, assured that “while 2022 has been a downturn year for the African smartphone market, a return to growth is expected in the medium term. This growth will be spurred by a return to normal in North African markets and an influx of more affordable models to offset lower incomes in most countries in the region.”
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