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"Sayonara, Japan!" Says Samsung

The South-Korean company pulls out of the Japanese retail home electronics market

Nov 9, 2007 20:36 GMT  ·  By
  

We knew that the Japanese consumer electronics market was a very tough and competitive one, but it seems that things are a lot worse than expected, at least for the foreign companies. Actually, the situation has become so dire that Samsung, one of the world's largest consumer electronics manufacturers, has decided to pull out, amid low profitability and very intense competition with the local companies.

Thus, according to an article by MarketWatch, who's quoting a Samsung spokesperson, the South Korean company has stopped the sale of portable MP3 players and LCD TVs through both its retail outlets and Internet stores, effectively ending its direct marketing activities from Japan.

According to the company, its annual sale of home appliance products via retail outlets and on the Internet in Japan amounted to between KRW70 billion (77.28 million U.S. dollars) and KRW80 billion (88.32 million U.S. dollars), which are by no means impressive features, taking into consideration the overall potential of the Japanese market. And it seems that these figures have been the thing that really convinced Samsung to leave: "We judge direct sales to individual consumers are less profitable," said James Chung, another Samsung spokesman.

However, that doesn't mean that Samsung will be leaving altogether. Thus, the company will instead strengthen sales of LCD monitors, chip components and handsets to corporate clients, these market segments proving a lot more profitable over the past quarters.

Although this might look like an unexpected move, it's actually not that surprising. After all, we're not talking about just any home electronics market, but about the Japanese one, where Sony, Panasonic, Toshiba and lots of other companies reign supreme. And although Samsung is one of the most important semiconductor, LCD and chip manufacturer around the world, it's kind of difficult to keep up with such a stiff competition.

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