Global Samsung Pow Wow Set To Have Impact On Markets Next Year
A key meeting is taking place this week in South Korea that could have a material effect on what happens in the appliance, smartphone communication and TV market in Australia next year.
Samsung Electronics is holding a global strategy meeting amid persistent uncertainties over the macroeconomic environment that CE and appliance retailers face in 2023.
This year Samsung who came into the market in April with high priced TV’s suddenly slashed prices by up to 40% within months because of a build-up in inventory. Other brands were forced to follow Samsung Australia’s lead which while good for consumers has resulted in losses for several competing brands.
Big share listed CE and appliance retailers such as Harvey Norman and JB Hi Fi is currently watching their stock levels as they do not want to be caught with excessive stock when it comes to reporting season.
Recently Harvey Norman warned suppliers over supply with franchisees restricted from placing orders for stock. This led to suppliers carrying excessive stock running int the peak holiday season.
Samsung’s regulatory filings showed its operating profit and net profit for the July-September period tumbled 31.4 percent on-year and 23.6 percent on-year, respectively.
Globally Samsung is over stocked and if that gets dumped down to the market it could affect other brands claim analysts.
Samsung inventory assets in the third quarter, was up 38.5 percent compared to the same period in the previous year.
It also saw a surge in its semiconductor inventory by nearly 10 trillion won to 26.4 trillion won in the cited period, the filings showed.
Between July and September Samsung profits tumbled 31.4 percent as the business unloaded discounted stock on the market.
Samsung’s global strategy meeting taking place this week, which is held biannually in June and December, and is a venue where executives at local and global units gather to review business conditions of each sector and discuss new growth engine plans for the upcoming year.
According to Nikki Asia the upcoming meeting will also be the first one after Samsung Group’s de facto leader Lee Jae-yong took office as executive chairman of Samsung Electronics on Oct. 27. However, Samsung’s most senior executive will not attend the meeting as usual, according to Samsung officials.
Samsung’s co-CEOs — Han Jong-hee, head of the DX division and Kyung Ky-hyun, head of the DS division, will preside over each division’s meeting.
Samsung executives are expected to discuss ways to confront and manage a series of challenges posed by global inflation, consumers’ pent-up demand, rapidly rising interest rates, geopolitical tensions, and the ongoing pandemic as well as the impact of inflation and in markets such as Australia rising interest rates and falling property values.
On the DX front, sluggish demand for smartphones and home appliances is having an effort on Samsung’s performance and this is one of the key concerns as the business looks to move further into the premium market spanning TV’s appliances and smartphones.
This raises the possibility that further price cuts could come for certain Samsung product categories.
Analysts claim that the outlook is gloomy for Samsung in the fourth quarter on the back of the sluggish semiconductor sector.
In the third quarter, the world’s largest memory chip and mobile phone maker suffered an earnings shock as its main semiconductor business faced major headwinds from weakening memory chip prices and demand for consumer products were falling.
In several markets Samsung recently slashed the price of their new 55-inch Samsung Odyssey Ark monitor.
The monitor made its retail debut just a few months ago and was priced at a whopping US$3,499.99. Now there is a generous discount, knocking $1000 off its retail price in the US market with cuts set to be given in Australia.