Samsung Electronics has formalized a partial exit from some businesses, including halting sales of home appliances and TVs in China. Last year, the Chinese sales subsidiary of Samsung Electronics posted a net profit of 168.1 billion won, down 44% from 300.7 billion won a year earlier.
On the 7th, according to the industry, Samsung Electronics recently notified Chinese distribution channels and partners of its policy to stop selling home appliances and TVs. Separately, it plans to continue high value-added businesses in China such as mobile, semiconductors, and medical devices. It will restructure its local operations through "selection and concentration," winding down low-share businesses amid Chinese companies' low-price offensive and continuing to foster future growth and develop new technologies. Existing buyers of Samsung Electronics home appliances will receive free or paid service in accordance with the Chinese Consumer Protection Law and other relevant regulations, depending on the period of use after purchase and the defect symptoms.
Samsung Electronics will reorganize its China business structure around research in advanced industries and cooperation and investment in production. It will maintain smartphones and services tailored to the Chinese market, such as W Series. It will continue product and technology research for mobile and keep operating its existing Suzhou home appliance plant and semiconductor plants in Xi'an and Suzhou.
Samsung Electronics is recently streamlining its production structure for appliances and TVs. Late last month, the DA (appliances) division held a management briefing for employees and shared a business restructuring plan, stating it is beginning to revamp the appliance business, including outsourcing certain appliance lines such as dishwashers and microwave ovens. It also decided to close its Malaysia plant, one of its key overseas production bases. It has launched a management review of Korea HQ, which handles domestic sales and operations for TVs, appliances, and smartphones.
At its first-quarter earnings conference call this year, Samsung Electronics said, "The appliance business is facing increasing profitability pressure due to intensifying competition and tariff risks," and noted, "We are pursuing selection and concentration across the business."