[East Asia Summit] Asian Companies Lead the Global Market

The uncertainty still lingers ahead of the global economy mainly because of gloomy atmosphere in American economy with record high in unemployment rate of 9.8 percent, though the International Monetary Fund (IMF) recently announced that the world economy is finally stirring from a deep recession and raised its forecast for global economic growth next year.

Some pessimistic economists even say about the possibility to witness a ‘double-dip’ recession, which occurs when the economy has a recession, emerges from the recession with a short period of growth, but quickly falls back into recession.

The axis of global economy starts to move towards the eastern emerging markets including China, South Korea, and India as the advanced countries are highly unlikely to pull out of the recession soon. In spite of recession hit the whole planet, the Asian economies clearly indicate high possibility of recovery by making a successful and swift turnaround.

The world is watching every movement in Asian markets based on the belief that emerging markets are the main engine for economic growth in the world. In particular, the Asian companies in South Korea, China, and Japan receive more attention because Asia is rising as one of the hottest spots for growth. In fact, the gross domestic product (GDP) of three countries accounts for 16.7 percent of the total global GDP.

◆ Korean Enterprises Lead Competition through Localization

Samsung Electronics, the flagship company of Korea’s top conglomerate, succeeded in clocking its profit back to the level before the financial crisis by achieving operating profit of 2.52 trillion won in second quarter of 2009. The company announced this week its third quarter earnings forecast, saying that it expects more than 4 trillion won in operating profit and citing strong performances in its four core divisions including television, cell phone, memory chip, and LCD panel.

Samsung Electronics is accelerating its efforts to expand its market share in China by setting up production plants in Tiajin and Huizhou where the company produces 1,450 units a month. It is also scheduled to build the 8th - generation LCD production factory in China.

Hyundai-Kia Automotive Group is also leading the global market by recording growth rate of average 20 percent despite the stagnant condition in vehicle market. The group's Chinese units sold a combined 484,266 units from January to August, grabbing a 9.8 percent market share. Hyundai Motor's local subsidiary in Beijing ranked fourth with a 7.1 percent market share.

Hyundai Motor America also saw September sales to increase by 27 percent compared with the same period a year ago. For the calendar year to-date, Hyundai sales are up 1.4 percent compared to last year. This also marks the ninth consecutive month of significant year-over-year gains in retail market share.

LG Electronics upgrades its brand identity through localization in China under the transformation strategy for the past three years. As a result, the most recognized consumer electronics company was able to pull off upgrading the image as a line of premium products. In China where the group operates 11 affiliates and 48 local subsidiaries, the leading electronics maker relocated there all production lines for small IT products, including desk top PCs, laptops and MP3 players to boost managerial efficiency through cost-cutting measures.

By strengthening ties with local Chinese firms, LG will secure more distribution channels for its home appliances and expand R&D investment to get more profits.

LG Chemical, the largest ABS (acrylonitrile-butadiene-styrene) manufacturer in China, aims to keep its No. 1 position in the market by expanding investments in the chemical sector.

Analysts say LG’s strategies in the global market, premium marketing for Europe, `localization’ in emerging markets and technology in North America will pave the way for the group to bolster its presence in the long-term. But they advised more pre-emptive measures will be needed to keep and even stamp its dominant position in global markets.

◆ Japanese and Chinese Look for Niche Market

Japanese companies are making every effort to regain their reputation as the most efficient company in the world.

Toyota Motor has recently named Akio Toyoda, grandson of the founder of Toyota, the president of the Japanese carmaker under the goal of ranking the first place in American market share. President Toyoda plans to strengthen the self-reliance of business in North America.

Sony Entertainment, the world’s best video-game maker, also decided to ignite its engine by starting an aggressive promotion in order to recapture the game market. After a 100-dollar cut of the PlayStation 3 video game console in August, sales for the initial three weeks jumped up about 300 percent. The company also announced that it is planning a spring release of its new motion controller for the PlayStation 3.

Chinese entrepreneurs are also tapping into the niche market by making the most of cutting-edge technologies. Chinese electric vehicle manufacturer BYD started to attract huge investment since the introduction of the F3DM, the world’s first mass-produced plug-in hybrid car in December. BYD’s profit gained 98 percent in first half as it added new models and benefited from government tax cuts designed to revive industry wide demand. The Shenzhen-based company’s sales from the auto business more than doubled in the period to 8.88 billion yuan.

Lenovo, the Chinese laptop manufacturer, is one of well-known enterprises for its innovation and leadership. The company is the fourth largest company in the world with respect to computer and laptop products. The secret behind the success of Lenovo is World sourcing. The secret strategy of Lenovo is the power to make advancements across the globe. By taking over the PC division of IBM in 2005, the company was able to absorb the advanced technologies as well as the overseas network. And it found a large untapped market in rural areas thanks to the Chinese policy to give subsidies to PC buyers in rural areas as a part of its efforts to stimulate the domestic consumer market amid the global recession.

Haier Group, the world's fourth-largest white goods manufacturer, is a typical example of cautious gradualism. Geographically, it has worked outwards from near to distant, first setting up a trading company in Hong Kong, then in South East Asia, and then in the U.S. and Europe. Culturally, it has proceeded from similar to dissimilar. According to its official web site, as of 2007, the Haier Group had established a total of 64 trading companies (with 19 overseas), 29 manufacturing plants (24 overseas), 8 design centers (5 overseas) and 16 industrial parks (4 overseas).

아주경제= 신기림 기자 [e-mail]
(아주경제=ajnews.co.kr) 무단전재 배포금지