EXCLUSIVE:Why Did LG Want To Take Control Of Big Retailers Marketing, As They Move To Sell Direct?

LG Electronics management appear to believe that they are better marketers than retailers, with the Company who is moving to sell direct soliciting retailers in Australia, to take over marketing for LG products as opposed to providing marketing funds directly to retailers.

ChannelNews has been told that one major retailer of LG TVs, and appliances flatly rejected the Companies marketing proposition.

The Company who has openly admit that they collect and sell confidential data on their customers recently admitted that they are investing marketing dollars to sell direct, with one major retailer of LG products in Australia recently propositioned by LG local management, who it’s alleged claimed to the retailer that that they wanted access to the retailer’s database which number’s millions.

ChannelNews understands that the retailer refused LG Electronics proposition with LG management indicating that they were under pressure from senior management and that marketing dollars that in the past have been allocated to individual retailers may not be available in the future.

We have also been told that several brands who claim that they are being “pressured by retailers for marketing dollars are being questioned by parent Companies as to why they have to invest “Excessive below the line marketing dollars” with retailers in Australia who are paid higher margins than “retailers in other Counties”.

A move by LG Electronics Australia to sell more of their products direct as opposed via a retailer appears to have paid off with the Company reporting a significant lift in profits recently.

In 2024 LG Electronics delivered $26.9M in profits up from $20.6M in 2023, revenues were also up from $947M in 2023 to $1.033 billion in 2024.

LG also increased their marketing expenditure by $1.4M in 2024 however it’s not known how much the Company spent on pushing consumers to LG’s own direct sell web site vs a Harvey Norman, The Good Guys, JB Hi Fi or Bing Lee web site or retail store.

Former LG Electronics Australia Marketing Directors have previously quit the Company after arguments with South Korean appointed management who have in the past cut back investment in marketing while demanding that Asian developed advertising is run in Australia.

One argument centred on a demand by LG Display, South Korea to run OLED TV billboard advertising that was described as “Terrible and unsuitable” for the Australian market.

The local marketing director wanted to invest in Australian developed creative but was knocked back.

He quite after further budget cuts by senior management.

“LG doesn’t need a marketing director in Australia, what they need is a yes person who accepts Asian developed creative that is unsuitable for the Australian market. You are basically a marketing assistant working to what Korean management want they said”.”

Willian Cho the former President of LG Electronics has moved to change the structure and operations of LG Electronics globally following his appointment as global CEO.

He admits that he wants to see “structural change” in how LG does business in the future and that selling direct is a key part of the Companies future along with subscription based selling.

Cho who was well known for what has been described as “tough” management of LG Electronics Australia, admits that LG is increasing its market presence through new business models including selling direct and new subscription based models that could see consumers motivated to subscribe to renting a TV or appliance direct from LG.

ChannelNews has asked LG Electronics Australian marketing director Gemma Lemieux (Seen below)  to comment on the claims that LG wants to take over marketing for retailers.

At this stage LG Australia has not responded to our questions as to whether part of the structural change being implemented by Cho is the elimination of incentive marketing dollars for retailers or whether it’s simply a cost saving initiative.

This is the same CE manufacturer who has seen numerous marketing directors quit over several years because of marketing confrontations with senior management.

What’s not known is whether LG lacks confidence in what retailers have delivered for the brand in the past, or whether their invest of what we believe is millions of dollars in direct marketing, delivered higher profitability for the Company and that in 2025 they want to invest further in direct sell marketing.

LG Electronics has admitted that the Company benefitted from their investment in direct marketing with the Company claiming, “The company’s data-driven online brand shop is growing at a rapid pace, with sales surging over 80 percent YoY during last November’s Black Friday period”.

A senior executive at a leading retailer who held discussions said, “LG wants to take over marketing despite retailers delivering the lion’s share of their revenues”.

“Retail locations are key to consumers being able to experience a product and we know how to bring retailers into our own stores”.

“We are not going to hand over databases to a Company that is talking up their own online shop”.

Another retailer who is tracking the activities of brands who are moving to sell direct in an effort to cut go to market costs said, “We are tracking brands who are selling direct, the only problem is that they are not getting the traffic to their web sites similar to what big brand retailers get, and this is a problem for them”.

“If we move to remove a major brand from our stores it will send a clear message but more importantly, the brand will realise the value of what a retailer with hundreds of stores delivers and why retailer driven marketing is important, especially if a consumer trusts the retailer to deliver quality service and when they have a warranty claim”.

We are still waiting for a response from LG Australia management.