Korean companies increase global marketshares

In the global turmoil, Korean companies are on the road to fast recovery and seized this opportunity to increase marketshares.

IT exportations on recovery

At the end of last year, predictions was grim. IT exportations fell of almost 40% in January this year. However, in 8 months, the year to year basis tends to stabilize. The shrinkage was single digit in  August for the first time.

According to the Ministry of Knowledge Economy concerning the past month, IT exports fell 7.6 percent year on year to $10.6 billion, exceeding $10 billion for three consecutive months. With shipments of mobile phones, semiconductors and televisions dropping 17.9 percent to $2.28 billion, 7.2 percent to $2.88 billion and 8.6 percent to $440 million, respectively, exports were down across the board. Notably, shipments of display panels increased 7.7 percent to $2.55 billion. Exports to primary trading partners the United States, the European Union and Japan contracted 9.2 percent, 24.7 percent and 1.8 percent, respectively, but exports to China increased 3.8 percent.

Conquering martketshares

Despise the unfavorable overlook of this figures, Korean companies managed to conquer marketshares in an even-harder hit IT market. IDC firm reports that Samsung Electronics and LG Electronics combined marketshare of mobile handsets market went over 30% for the first time. They predated the marketshare of  others majors players, as the rest of Top-5 handsets manufacturers lost ground. Korean companies benefited from previous R&D and introduced many new models. But the main factor was a volatile won exchange rate, who plunged last year, as shown in the following graph.

[KRW/USD rate over 2 years]

Korean companies used this decisive advantage to compete on price, on which consumers focus more during economic crisis. Fueled with fresh incomes, companies are less impacted by cash scarcity and sustain comparatively more technology investments and marketing activities.

It will take time for competitors to catch-up : 2010 looks bright for Korean IT sector.