Korean Media Watch: Japanese electronics selling at half of Korean brands; Aggressive price cutting and exports worries Korean companies

From Munhwa Ilbo, January 03, 2014

http://www.munhwa.com/news/view.html?no=2014010301030124182002&w=ns

Translator: Simon Kim

As the value of the Korean Won rises and the value of the Japanese Yen goes down, the price of a Japanese brand 32 inch full HDTV is reported to be half that of the same from a Korean company.

Japanese companies are using the low value of the Yen to export vigorously, causing some discomfort from Korean companies.

According to the Korean Trade-Investment Promotion Agency (KOTRA) on the 3rd of January, domestic firms are feeling negative effects from the Yen’s fall in value in varying worldwide markets.

The South East Asian market is projected to grow by 5% this year.  And electronics, steel, and machinery exports to the region are being hit hard. KOTRA has discovered that prices of Japanese consumer electronics have decreased in price by 20%. A price of a full HD 32 inch TV is reported to be $800 USD from one Korean company and $650 USD from another Korean company. But a Sharp 32 inch HDTV was reported to be now $400 USD.

Sony has aggressively signed an agreement with a local telecommunications company to provide its phones free of charge. With steel, Japanese materials are 10 to 25% cheaper than Korean steel. And from January to August of last year, Vietnamese steel imports from Japan increased 12.3% while imports from Korea decreased 19.1%.

An industry expert from Germany says that the 15% drop in Japanese machinery prices from last April causes Korean prices to become less competitive. Another expert from the US declares that the variables most affecting new marketing strategies and current agreements have most to do with the low Yen.

Japanese companies are using the low Yen to sell at lower prices and create new marketing opportunities. This is expected to continue and accelerate and Korean companies need to worry the most as direct competitors.

A KOTRA spokesperson is quoted as saying that Japanese profitability due to the low Yen results directly against Korean exportation competitiveness. The spokesperson is said that this will continue to negatively affect Korean competition as the value of the Yen remains low.