Aug 13, 2013

    Korean brands' uphill battle in Japan

    BRANDISHING a new Sony Xperia as she left a mobile-phone shop in a trendy part of Tokyo, Ms Nisako Hanawa, a 17-year-old student, explained that she had chosen that brand "because of its cool design and its good reputation".

    Asked about another leading smartphone maker, Samsung Electronics of South Korea, she and a friend exchanged quizzical looks. "Samsung?" she asked. "I haven't heard of it."

    Samsung Electronics is the largest consumer-electronics company in the world, selling one out of every three smartphones and one in five television sets. LG, the other giant electronics maker in South Korea, has a significant share of television and washing-machine markets in Europe and the United States.

    But in trend-obsessed Japan, consumers have not caught on to the fact that elsewhere in the world, some Korean products are knocking Japanese rivals off the shelves.

    Many Japanese explain away the absence of Korean brands by claiming that the quality is inferior.

    The evidence says otherwise. Korean-made TV sets, phones, washers and cars rate higher than many Japanese brands in independent tests by Consumer Reports, CNet and others. LG TV sets have been getting favourable reviews in Japan.

    "I think things have improved compared to the old days, thanks to the influence of Korean popular culture," said Mr Lee Byoung Uk, assistant director of the Korea Trade-Investment Promotion Agency in Japan.

    LG said it sold about US$675-million (S$848-million) worth of TV sets, smartphones, washing machines, vacuum cleaners and other goods in Japan last year, up about 45 per cent from 2010.

    Samsung pulled out of Japan in 2007, after failing to make much of a dent here. (The biggest Korean carmaker, Hyundai Motor, also beat a retreat from Japan shortly thereafter.)

    But Samsung has come back for a second shot in Japan, starting with its smartphones.

    NTT Docomo, the largest mobile-phone carrier in Japan, has turned to Samsung to try to fend off rising competition from two rival network operators, SoftBank and KDDI.

    Those two companies have been poaching customers from Docomo, which does not offer the popular iPhone.

    "Docomo needs Samsung, and that is giving it an opening," said Mr Michito Kimura, an analyst at research firm IDC.

    Starting in May, Docomo plastered Japanese cities with advertising posters featuring the flagship Samsung Galaxy S4 smartphone alongside a Sony Xperia A. The campaign, for what Docomo bills as its "summer collection", is the first time that any Japanese carrier has given such prominence to a Samsung phone.

    So far, the results of Docomo's embrace of Samsung have been mixed.

    Analysts said Samsung smartphones have been a tougher sell in Japan than in other countries, where consumers are familiar with the brand through television sets and other goods.