LG Electronics, Returning to Russia...? Eyes on the 'First Returning Company'

As interest grows locally over global companies returning to the Russian market, some predict that LG Electronics will become the 'first Western company' to do so.

Husein Imanov, founder of Russian home appliance company Jackys, told the Russian daily Kommersant on the 31st (local time), "LG Electronics will probably be the first major foreign supplier to officially return to Russia." He predicted this because LG Electronics accounted for about 25-26% of the Russian washing machine and refrigerator market, making Russia a key sales destination, and maintained its office and factory staff since 2022.

Larisa Senina, director of Russian electronics distributor Marvel Distribuciya, told Kommersant, "If LG Electronics fully returns to Russia, it could capture 20-30% market share in refrigerators, washing machines, and TVs within a few years."

It is also reported that LG Electronics has partially resumed operations at its manufacturing plant in Moscow Oblast. Products produced at this pilot-operated plant are said to be supplied to Commonwealth of Independent States (CIS) countries.

Washing machine production line at LG Electronics' Luzha plant in Russia. Provided by LG Electronics

Locally, there is growing interest in the moves of Korean companies including LG Electronics. Earlier this month, TASS news agency quoted Maxim Kadakov, editor-in-chief of Russian automotive magazine Zarululn, predicting that if sanctions are lifted, Korean carmakers such as Hyundai and Kia will be the first to return. On the 28th, Russian Telegram news channel Mash reported that Samsung Electronics has begun large-scale hiring at plants including the Kaluga factory.

Additionally, local media reported that Viagra, an erectile dysfunction treatment, and lingerie brand Victoria's Secret have recently applied for trademark registration with the Russian Federal Service for Intellectual Property, indicating preparations to re-enter the Russian market.

Previously, global companies from Korea and the West, including LG Electronics, suspended or withdrew their businesses in Russia after Russia launched its 'special military operation' in Ukraine in February 2022. Recently, as Russia has engaged in peace talks with the US and Ukraine, expectations have grown that Western companies will return to the Russian market. Russian President Vladimir Putin also mentioned at a Russian business event on the 18th that "some companies that left Russia plan to return."

Russian Prime Minister Mikhail Mishustin said on the 26th regarding the return of Western companies, "Companies that did not declare withdrawal from Russia, continued operations through subsidiaries, treated employees responsibly, or left Russia due to pressure from their home governments but maintained jobs and technology in Russia will be able to return."