Top Five Export Industries in Korea Drowning in Sea of Chinese Oversupply
Equipment industries require a lot of infrastructure investment.
1 AUGUST 2014
The export performances of the top five export industries are radically worsening due to the appreciation of the Korean won and oversupply from China. Hyundai Heavy Industries reported its historically worst loss due to low order prices, and the smartphone sales of Samsung Electronics decreased for the first time. The golden days of Samsung Electronics’ smartphone businesses, which have been leading the Korean IT industry for the last three to four months, might have passed.
Professionals point out two major reasons for the sluggish sales of Samsung Electronics’ smartphones. First, Chinese manufacturers are rising. Samsung Electronics has been dominating the market based on its advanced technologies, but the high-end product market is stagnant. On the contrary, in the low-end market, Chinese companies including Xiaomi, Lenovo, Huawai, and ZTE are aggressively challenging Korean companies. The market shares of Xiaomi in China, the so-called “Apple of China,” is 21 percent, right behind Samsung (23 percent). A foreign consulting associate said, “As smartphone manufacturing technologies become widely available, Chinese companies are more capable of manufacturing quality products, and their price competitiveness beats Korea.”
The second reason is a lack of innovation.
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