Samsung Electronics is going to strengthen its online distribution and is currently making preparations by recruiting merchandisers (MD) from home shopping malls and online malls.
According to an industry on the 3rd, Samsung Electronics is carrying out variety of strategies to diversify its online distribution channels and to strengthen online business after newly establishing an online task force.
Samsung Electronics newly established an online task force within Samsung Electronics' South Korea Overseer. To respond to increased trend of online household products, Samsung Electronics recruited professional MDs from home shopping malls and online malls that are familiar with corresponding industries.
A reason why Samsung Electronics is strengthening its online distribution business is to respond to online shopping industry that is making continuous growth. Although Samsung Electronics had employees that specialize in online distribution network even before it established this task force, it is planning to strengthen its business even more by promoting them to online task force.
According to Statistics Korea, growth rate of offline distribution businesses such as department stores and large marts is continuing to go down from third quarter of 2011 to third quarter of 2015. On the other hand, online shopping is showing a growth rate of more than 10% annually.
More online transactions are taking place even in household appliance industry. According to a market research company called GFK Korea, markets for household appliances through open markets were worth about $1.04 billion (1.2 trillion KRW) in first quarter of 2016. About $4.35 billion (5 trillion KRW) worth of household appliances are sold through open markets in a year. Considering that $11.3 billion (13 trillion KRW) are generally made from household appliances in South Korea, percentage of online sales is not small.
Percentage of sales from information household appliances such as computers and laptops is the highest as $478 million (550 billion KRW) of sales is made in a year. Followed by them are image and audio appliances, small household appliances, and large household appliances at $252 million (290 billion KRW), $191 million (220 billion KRW), and $104 million (120 billion KRW) respectively.
If Samsung Electronics strengthens its online business, variety of household appliance O2O (Online to Offline) market is also possible through interconnection between online distribution and current offline household appliance stores.
“We are going to continuously strengthen our online task force to respond to online distribution channels.” said a representative for Samsung Electronics' South Korea Overseer. “We are going to diversify channels such as home shopping, open markets, and online malls that supply products and carry out variety of marketing strategies.”
Staff Reporter Park, Sora | srpark@etnews.com