Will Own Stores Help LG Gain CE Market Share?
LG Electronics is bypassing the middleman. The consumer electronics manufacturer plans to open 600 LG brand stores in developing markets in addition to the 3,000 locations it currently operates, according to The Wall Street Journal.
The South Korean company is taking this step as Apple continues to expand its own store network, Samsung opens shops inside of Best Buy, and Google reportedly considers establishing a brick & mortar presence.
LG has seen its share of the global mobile phone market decline significantly in recent years, from 10 percent in 2009 to just over three percent in the fourth quarter 2012.
Besides its investment in retail operations, the company is boosting its marketing budget.
"The increased marketing spending should have some benefit for LG Electronics’ smartphone market share, especially in the mid to high end," Mark Newman, an analyst with Sanford C. Bernstein, told the Journal. "However, it will be tough to compete with Samsung and Apple."
LG is also looking to upgrade its various consumer electronics technologies to gain ground. Yesterday, LG announced it would be the first manufacturer to offer PayPal on its Smart TV platform.
"PayPal significantly reduces the number of steps the user has to take in order to complete a transaction; saving them time by eliminating the need to enter credit card and address details for each subsequent purchase," Richard Choi, senior vice president of the Smart Business Center at LG Electronics, said in a statement. "Moving forward, it will also make it possible for LG to better integrate digital commerce with first-class home entertainment."
- LG to Expand Retail Stores – The Wall Street Journal (sub. required)
- LG Electronics First To Debut PayPal On Smart TV – LG Electronics
How important is distribution through brick & mortar stores to a manufacturer’s share of the U.S. consumer electronics market today? Do you expect more manufacturers to open their own stores in the U.S. or will the emphasis, as in the case of LG, be on other markets?