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Why LG is bowing out from the Chinese market

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Samsung’s cool and friendly South Korean neighbors appeared on the smartphone news recently. Numerous reports claimed that they would be bowing out from the Chinese market.

Why will a smartphone brand as big as LG  leave the Chinese smartphone market knowing full well that the market in China is the largest in the world today?

Numerous questions asked by people were left unanswered until a reporter from sohu visited LG’s Beijing office and got the answer directly from the horse’s mouth (the company representative)

The reason according to the representative is an increase in competition from local brands.

That’s obviously making sense. While the Chinese smartphone market as I have written in the second paragraph is the largest in the world and holds many profits for any brand that ventures into it. The market competition there is fierce. The competition there is so daunting that even Samsung and Apple; being the world’s most popular and selling smartphones brand is getting their butts kicked in and out. Every year has its re-shuffled stats; the brand that occupied the top spot the previous year will never remain there in the coming year.

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In 2017, Apple could only manage to push Xiaomi out of the fourth spot to settle down there because to first, second and third that has been its birthright in other country’s market was occupied by local brands, Huawei, Oppo and Vivo respectively. Samsung wasn’t seen anywhere in the top 5 spots.

LG last updated its Chinese smartphone website last with the 2016’s LG G5 SE, maybe the phone sold so poorly, and that gave LG the full memo that there’s nothing for them in China.

Meanwhile, in separate news reported by ETnews, the company is not pulling away from China. Come to think of it, with the 5G network showing up and foldable smartphones around the corner, LG couldn’t possibly ignore the Chinese market when these products are fully available for sales. That’s leaving a lot of money out of the table.

According to the report, LG is instead Chinese subsidiary was re-organizing as part of is Korean sale division and also it wants to find out LG has been struggling in China for a very long time. They’ve got good products worthy to compete effectively with top products that are ruling the Chinese market. They are rated well in other countries; and so on. I believe they just wanted to back out a little, re-strategize and shoot back into the market with full velocity, different marketing strategy, and mouth-watering products that the Chinese market cannot say no to or substitute for smartphones from the local brands.

Bottom line, LG will temporarily leave China only to figure out smarter ways to capture the Chinese market. The South Korean Smartphone Giant has been receiving spider kicks from all angle;  if you’ve been taking note of their sales stats in China, you will see that LG has been operating with losses for an eleven straight quarter.

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