Samsung to Re-Enter Japan Flat Panel TV Market

Osaka - Wednesday, January 4, 2012




Nikkei, Japanese leading newspaper specialized in business and economy, reported on January 3 that Samsung decided to re-enter Japan flat panel TV market in 2013. They plan to launch high visual quality TVs with organic EL (electroluminescence) considered to be one of the promising next generation TVs and high-end LCD TVs.



Samsung is the global leader of flat panel TV with the #1 worldwide market share of almost 20% but they had not developed their business in Japan. Their re-entry in the Japan market would mean more options for Japanese consumers, and Japanese companies require countermeasures; TV business of companies such as Sony and Panasonic has been under-performing and for example Panasonic gone to red lately.



1. How has Samsung’s business been in Japan?



Samsung had once tried to enter Japanese TV market in 2002 by launching LCD TVs but they were unsuccessful due to weak corporate brand. Their market share remained as low as 0.3% and immediately withdrew from the Japan market in 2002.



2. Why did Samsung decide to re-enter the Japan flat panel TV market?



It is because their brand awareness has drastically improved in 2011 attributing to the success in their smart phone business of Galaxy series sold via a leading Japanese carrier, NTT DoCoMo from 2010. The company seems to have estimated that it is possible for them to gain market share of at least a few % if they launch organic EL TVs with low power consumption prior to their Japanese counterparts.



3. What actions has Samsung already taken?



The company already made approach to several leading retailers. The produce line-ups are assumed to be large TVs of 40 inch or larger of high-end LCD TVs with 3D and Internet connection functions. They also plan to sell TVs of 55 inch or larger with organic EL to avoid revenue deterioration from price collapse. Organic EL TVs will be first sold in South Korea in 2012.



4. How is Samsung positioned in the worldwide market compared to their Japanese counterparts?



According to Display Search, a leading research company based in the U.S., as of 2010, worldwide flat panel TV market share (volume base) of Samsung is #1 with 18.7%. #2 is LG with 13.1%, #3 is Sony with 10.3% and #4 is Panasonic with 7.9%. Samsung has been the worldwide leader for 5 consecutive years and in 2011 they had been targeting to increase their business by 15% to hit worldwide sales of 45 million TV sets.



5. What is the meaning of their re-entry to the Japan market in their global business strategy?



It is to “fill” their vacant regional market when it is difficult to grow their business in other parts of the world. Their main markets of the U.S. and Europe have slowed down due to debt crisis. China business is also tough with severe price competition with Chinese local makers.



Thus it is logical for them to re-enter the Japan market with leading-edge product line-ups to grow their global business when their corporate brand has become strong in Japan, although the Japanese flat panel TV market is estimated to decrease to 150 million units in 2011 from 260 million units in 2010 due to rebound of ad-hoc demand of transition to digital terrestrial transmission in July 2011.



6. What are the author’s final thoughts?



Many Japanese companies used to thoroughly enjoy benefit from relatively large domestic demand/market and unique needs of Japanese consumers that made their global counterparts difficult to enter the Japan market. For this reason, they could enjoy high market share in the Japan domestic market even if they were followers in the worldwide market, with which they could make their ends meet.



However, that is no longer the case. Demand/market of Japan is shrinking and slowing down, other markets such as China, India and Russia are emerging. Non-Japanese companies have become more competitive even in industries that Japanese companies used to lead (e.g. automobile, home electronics). Japanese consumers are more open to non-Japanese brands and products.



Samsung’s re-entry to Japanese flat panel TV market is a warning that Japanese companies need to change their mindset and review their strategy, business model, products and services, marketing etc. to meet the today’s global business environment for survival and sustainability.



The author, who used to initiate global web strategy when she was working for a Japanese consumer electronics giant, first benchmarked western global companies then added Samsung 2002 - 2003 when the senior management were interested only in Japanese counterparts. Her colleagues responsible for global market also regarded Samsung as the company they really need to be aware of. Their assumption came out to be quite true.





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Samsung’s re-entry to the Japan flat panel TV market since their first attempt of entry in 2002 is a warning that Japanese companies need to change their mindset and review their strategy, business model, products etc. to meet the today’s global business environment for survival and sustainability. Unlike in 2002 when Samsung’s corporate brand was weak, their brand is now strong with their successful business in smart phone business of Galaxy series while global competitiveness of Japanese companies has done down.