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No jobs lost in India due to exit of mobile business: LG

South Korea’s LG Electronics’ decision to exit its competitive mobile segment will not lead to job losses in India as LG India has decided to absorb the participating employees into its mobile business unit, the company clarified in response to
business line’ Queries.

However, the fate of its manufacturing plant in India is not known as the company refused to comment on the matter. When asked about possible job losses, an LG India spokesperson said:
business line that it will internally absorb the employees involved in its mobile business unit. “With our strong legacy in India and broad product portfolio spread across business sectors, we have ample opportunities to retain talent, currently working under the mobile division. As a company, we will assimilate employees internally, keeping in mind their core expertise,” said the spokesperson.

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Impact on Indian business

Analysts tracking the sector said LG’s exit from the mobile phone business would not have a significant impact on its business in India as the company’s smartphone market share in the country is less than one percent.
business line .

In India, LG had just 0.15 percent market share in smartphones in 2019 and 0.3 percent in 2020, said Shelby Jain, Research Analyst at Counterpoint Research. As other analysts have emphasized, “LG’s closure will not The mobile business had a significant impact on its business in India because India was not one of their strategic markets for their smartphone business.”

“For LG, India was a very important smartphone market,” said Anshul Gupta, senior research director at Gartner.

Tough competition

In India, five players dominate 85 percent of the smartphone market, with four of these being Chinese brands, Upasana Joshi, Associate Director of Research, Client Devices, IDC India, said, adding that LG’s launches in the smartphone segment cannot to be so. compared to these players. She added that the company also lagged behind in terms of its marketing activities, a far cry from the high decibel marketing presence of Chinese companies in the space.

In India, it faced stiff competition from Chinese brands in the mid-range segment, and Jain confirmed Apple, Samsung, and OnePlus in the premium segment. “Its share in the Indian market was stagnant. Although it had access to great technology and products, it lacked a go-to-market strategy. Although it had a good opportunity in the premium market, the product portfolio was more focused on North American and Latin American markets, Jin explained.

Gupta noted that LG’s smartphone business contributes globally to the EBITDA of its overall business. The move towards exit – globally – should be driven by pressure on market share, unit sales and margins; the lack of profitability of the smartphone business in the past 4-5 years; As well as competition from Chinese brands.

Jin said LG’s largest markets are North America and Latin America, which account for more than 80 percent of smartphone sales.

focus areas

LG’s statement on Monday said: “LG’s strategic decision to exit the incredibly competitive mobile segment will enable the company to focus resources on growth areas such as electric vehicle components, connected devices, smart homes, robotics, artificial intelligence, and business-to-business.” In addition to the platforms and services.”

When asked how LG India can contribute in these areas, a company spokesperson said, “Certainly, this is a difficult decision. However, LG’s strategic decision to exit the incredibly competitive mobile segment will enable the company to focus resources on areas of growth. We will continue to Strengthening our product leadership across the consumer durables industry.”