LG Electronics widens gap with Whirlpool in home appliance market Revenue gap between two firms has widened to $1.71 billion
이 기사는 2021년 10월 26일 08:05 더벨 유료페이지에 표출된 기사입니다.South Korea’s LG Electronics has widened its revenue gap with US rival Whirlpool to 2 trillion won ($1.71 billion) in the third quarter thanks to its strong production lines at home and abroad and efficient supply chain management (SCM) system.
Whirlpool said its revenue rose to $5.5 billion from $5.3 billion a year ago in the third quarter, which came below the market consensus of $5.75 billion.
According to analysts, LG Electronics’ home appliance business is forecast to generate 7 trillion won in revenue in the July-September period, which is about 500 billion won more than that of Whirlpool. In terms of revenue, the gap between the two companies was 1.58 trillion won as of the end of June, which is expected to widen to 2 trillion won as of the end of September.
LG Electronics’ home appliance division overtook the US home appliance giant as top home appliance maker thanks to its efficient SCM system. “Whirlpool is reportedly experiencing disruptions in its supply chain, having trouble delivering washing machines, refrigerators, and microwaves,” said an official at LG Electronics. “In contrast, LG Electronics has no major problems in logistics thanks to the localization of production lines.”
LG Electronics is trying to manage risks locally as part of efforts to strengthen its SCM. The company provides its partner companies and overseas entities with corporate social responsibility (CSR) management training on a regular basis by conducting CSR inspections.
LG Electronics conducted self-inspections on CSR for a total of 1416 partner companies last year. The company provided on-site consultations to 20 companies, aiming to reduce the proportion of high-risk partner companies from current 1.5% to less than 0.5%.
Another factor that has made the Korean company overtake Whirlpool's position is the logistics system. Whirlpool's supply of products to the US and European markets has been delayed due to difficulties in securing parts. The US home appliance maker has failed to obtain microcontroller units used in refrigerators, microwaves, and dishwashers. It is said that the company’s production volume decreased by 25% compared to last year due to the blocking of sea freight routes.
In contrast, LG Electronics is operating 35 production facilities worldwide, including China, North America, Europe, and Asia, in addition to seven facilities here.
Analysts said LG Electronics’ decent performance was also led by diversifying its product lines, including a suite of high-class consumer goods sold under the brand of LG Objet Collection. (Reporting by Hyun-ji Sohn)
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