Koo Kwang-mo's LG Takes a Step Closer to the Global No.1 Throne in Home Appliances

LG Surpasses Whirlpool's Cumulative Q3 Sales in the US... Whirlpool Hit by Parts Supply and Logistics Shortages

[Image source=Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] LG Electronics is expected to achieve the historic milestone of becoming the world's number one in the global home appliance market based on annual sales for the first time this year. This is the result of the ‘selection and concentration’ strategy and management philosophy centered on ‘customer value’ under LG Chairman Koo Kwang-mo, who took office in 2018. With LG Electronics' performance surpassing US-based Whirlpool up to the third quarter, Whirlpool is expected to face difficulties in the fourth quarter, a period when it has traditionally focused its sales efforts, due to supply chain and logistics issues.

Whirlpool announced on the 21st (local time) that its third-quarter sales increased by 3.7% year-on-year to $5.5 billion (approximately 6.4828 trillion KRW). This result slightly missed the market consensus, which had initially forecasted $5.75 billion. As a result, Whirlpool's cumulative sales through the third quarter amount to $16.2 billion (19.0917 trillion KRW).

Accordingly, LG Electronics' home appliance division has maintained the world’s number one position through the third quarter this year. LG Electronics' home appliance sales in the first half of the year reached 13.5 trillion KRW, and the market expects third-quarter sales, to be announced on the 28th, to be in the high 6 trillion to low 7 trillion KRW range. Cumulatively, sales are expected to exceed 20 trillion KRW, surpassing Whirlpool’s sales of around 19 trillion KRW. Ultimately, for Whirlpool to overtake LG Electronics, it must achieve sales exceeding 1.5 trillion KRW in the fourth quarter alone.

Whirlpool has traditionally employed a strategy of boosting sales in the fourth quarter based on events like Black Friday. However, this year, it is assessed that Whirlpool is unlikely to achieve results that surpass LG Electronics. In particular, Whirlpool is struggling with supply difficulties due to semiconductor chip shortages and logistics disruptions, making it difficult to expect performance similar to previous years. On the other hand, LG Electronics is focusing on market dominance based on a stable supply foundation, leading to analyses that the gap between the two companies may widen further.

On the same day, Whirlpool revised its annual sales forecast downward from the initially expected $22.5 billion (approximately 26.5 trillion KRW) to $22 billion (25.9 trillion KRW), lowering the year-on-year growth rate estimate from 16% to 13%. In contrast, LG Electronics is expected to achieve sales exceeding 26 trillion KRW in the home appliance sector this year. This is because it is already projected to record sales exceeding 20 trillion KRW through the third quarter, with fourth-quarter sales expected to approach 6 trillion KRW.