Jo Joo-wan, CEO of LG Electronics, is visiting corporations in 'Global South' countries such as India, Indonesia, and Vietnam in rapid succession, accelerating the acquisition of future growth engines centered on business-to-business (B2B) transactions.
According to the industry on the 21st, CEO Jo recently visited LG Electronics' corporations in Indonesia and Vietnam with key executives. This follows a business trip to India earlier this year, marking another visit to a Global South region after three months.
'Global South' is an emerging strategic market that LG Electronics is actively focusing on, including India, Indonesia, and Vietnam, as well as regions in Asia, Latin America, and the Middle East and Africa.
During last month's regular shareholders' meeting, CEO Jo noted, "From this year, we will add the strategic axis of 'regions' to the existing growth strategy and pursue growth acceleration in promising regions with high potential." He added, "We will concentrate on discovering growth potential and business opportunities in emerging markets represented by the Global South."
It is reported that during this visit, CEO Jo emphasized the importance of B2B businesses such as heating, ventilation, and air conditioning (HVAC), commercial display, and high-efficiency systems. He particularly stressed the significance of data-driven customized solutions for accelerating B2B business and maintaining long-term partnerships with B2B customers.
CEO Jo's vision is that as major foreign corporations flock to the Global South, which has a rich labor population, the B2B business opportunities in HVAC, smart factories, and more that LG Electronics is nurturing will naturally increase.
In fact, as big tech companies like Google and Microsoft (MS) have begun large-scale investments in data centers focused on Southeast Asia, business opportunities in HVAC in the Global South are rapidly becoming apparent.
Recently, LG Electronics has been achieving results by forming a strategic partnership with MS, agreeing to supply chillers for the artificial intelligence (AI) data center being built by MS. It also supplied the high-efficiency commercial air conditioning system 'Multi V I' to a super-large logistics center in Singapore, surpassing Japan's Daikin, which is the global leader in the HVAC industry.
In addition, LG Electronics is ramping up its efforts to penetrate India, a key region of the Global South and the world's most populous country. LG Electronics is pushing forward with the construction of its third factory in Sri City, Andhra Pradesh, as a 'comprehensive production base for home appliances,' following its existing factories in Noida and Pune. The third factory is scheduled to start construction early next month.
As there is significant market growth potential, the LG Electronics corporations in the Global South are also showing strong growth. According to LG Electronics' audit report, among the major overseas corporations that disclose sales and net income, five corporations located in the Global South (India, Vietnam, Thailand, Indonesia, Brazil) recorded a combined revenue of 16.3363 trillion won last year. This figure represents an increase of nearly 17% compared to two years ago in 2022. The combined net profit earned by these five corporations last year was a total of 766.6 billion won, up 36.6% compared to two years prior.