Samsung meets Chinese challenge

South-Korean Samsung Group has resolved to strengthen its operations in China by tapping into the demand for up-market goods in the world“s most populous nation.
At a meeting of its electronics unit…

South-Korean Samsung Group has resolved to strengthen its operations in China by tapping into the demand for up-market goods in the world“s most populous nation. At a meeting of its electronics units“ executives in Shanghai, Samsung affirmed its plan to focus its efforts on establishing a presence in China“s market for high-end products, a different tack from its previous efforts to use China as a production base, Samsung officials said. “China presents a big challenge to Samsung as well as our country. As such, our strategies for China are closely related with Samsung“s survival plan,” said Samsung Group chairman Lee Kun-hee, who chaired the meeting. Attending the meeting were high-level officials of Samsung“s electronics affiliates – Samsung Electronics, Samsung SDI, Samsung Electro-Mechanics and Samsung Corning. Lee stressed the importance of making high-quality Samsung products available on the huge market, saying China will emerge as the second most competitive market next to the US. Samsung plans to set up a sales unit in Shanghai within the year as part of its efforts to bolster sales and marketing activities there. The group will also place more up-market goods on its digital media product line-up, including mobile handsets, plasma display panels (PDPs) and projection TVs. It opened a communication research centre in Beijing last October and will set up a design centre in Tianjin for research and development (R&D) into products tailored to meet Chinese needs. Through the redefined strategy, Samsung plans to achieve a 20% annual hike in its sales in the Chinese electronics sector through 2005. Currently, Samsung sells US$ 7 billion“s worth of electronics goods a year in the country and it hopes to increase revenues to US$ 14.5 billion by 2005. In a bid to become one of the world“s top five electronics firms, the group will also make efforts to raise the level of brand recognition in China to the 70% level in the next four years from the current 40% range.