LG Electronics South Africa's Expansion Calls for Opening of new Cape Town Office

In the mid 1990's LG Electronics changed their focus from domestic Korean markets and targeted a growth strategy through export. Today, over 70% of LG white goods are exported to markets like China, the United States and South Africa.

LG Electronics South Africa was established in 1997 and in its six year history the company has grown rapidly. From nowhere LG have become the number one brand in South Africa for washing machines, air-conditioners, microwave ovens and monitors.

"The reason for our success has been simple - supplying state of the art products at competitive prices. However the principle of running a profitable business remains," says YJ Khang, Managing Director, LG Electronics South Africa.

"LG has set a challenging real growth target of more than 40% for 2003. What makes this target even tougher is economists are predicting that household consumption expenditure will remain around 7,6% of total household spending. LG has achieved solid growth in a sideways market for the last five years and we believe that LG's reputation for high quality goods has enabled the company to continue this path."

"In South Africa we have representation in four distinct segments of the market, each one being very competitive . LG's consumer brown goods (televisions, videos, DVD players and home entertainment systems) are proving very popular and this at a time when most competitors are experiencing a reduction in sales in this sector."

"Our white goods or kitchen appliance business entered a very competitive market and we have quickly established ourselves as a manufacturer of choice, South Africa will soon be introduced to the range of Digital Home Network appliances that are sure to redefine how people run their homes."

Khang continued to state that LG was recently recognised as the largest manufacturer of air-conditioners worldwide for the third successive year. "In South Africa, LG air-conditioners have quickly become the product of choice amongst specifiers and consumers; and finally the IT products business has expanded their range of computer equipment and will continue their dominance in the monitor and optical storage arena.

"In 2002, LG entered the cellular business and are currently in the process of launching their range of handsets in South Africa. A full range including entry-level products to a top of the range model that is equipped with a digital camera, colour screen and GPRS capability will be available mid-year. Internationally LG is poised to break into the 'Top 5' cellular handset manufacturers during 2003.

Khang added that this incredible expansion has led LG to move from their current Head Office in Johannesburg at the end of 2002. Larger marketing offices and warehousing facilities in Johannesburg are being joined this year with the new office in Cape Town. "Focusing largely on the service facilities, this should see LG's ability to service its customers in the area much more efficiently," added Khang.

Today, LG Electronics employs almost 200 people. All of these jobs have been created by the Korean multinational in the last 6 years.

Worldwide LG measures unaided brand awareness in the markets in which the company operates. In the Middle East and Africa unaided awareness of LG was a staggering 42,3%, in South Africa alone the figure is 48%, just four years ago the figure was a meagre 14,1%. LG is the second highest in the electronics sector in awareness terms in SA.

Khang concluded, "Innovative initiatives like the Free Service Campaign have heightened our company awareness. Our belief that LG products are reliable gave us the confidence to conduct daring market shaping activities like 'Free Service'. The South African public have taken to LG products quickly and all indications are that nothing is set to change."

"The campaign to leverage our position as the official global partner to the ICC Cricket World Cup 2003 will further contribute to achieving our national brand positioning objective."

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