When shopping for a new TV, appliance or smartphone, you‘ve probably come across the LG brand. With its sleek designs, cutting-edge features and ubiquitous marketing, LG has become one of the most recognizable names in consumer electronics. But despite its global reach, many consumers are still unsure about LG‘s nationality. A common misconception is that LG is a Chinese company, likely due to the fact that many of its products are manufactured in China.
However, the truth is that LG Corporation is a South Korean company through and through. Founded in Seoul in 1947, LG has grown into one of the largest and most diversified conglomerates in Korea, with over 70 subsidiaries spanning electronics, chemicals, telecom and more. While China plays a key role in LG‘s global manufacturing network, the company‘s headquarters, ownership and strategic direction remain firmly rooted in South Korea.
As a retail and consumer analyst with over a decade of experience covering the electronics industry, I‘ll take a deep dive into LG‘s history, structure, and global presence to dispel the myth of its Chinese origins once and for all. I‘ll also compare LG to some of its biggest Chinese competitors and offer some insights and tips for consumers weighing their options in the crowded electronics market.
Inside LG‘s Corporate Structure and Ownership
To understand why LG is often mistaken as a Chinese company, it helps to first examine its corporate structure and ownership. LG Corporation is the parent company of the LG Group, one of the largest chaebols, or family-controlled conglomerates, in South Korea. Some key facts about LG Corporation:
- Founded in 1947 as Lak Hui Chemical Industrial Corp. (pronounced "Lucky") by Koo In-hwoi
- Expanded into electronics in 1958 under the GoldStar brand, making radios and TVs
- Merged Lucky and GoldStar in 1983 to form Lucky-Goldstar
- Changed its name to LG in 1995, which stands for "Life‘s Good"
- Currently owns over 70 subsidiaries and employs over 240,000 people worldwide
- Generated over $145 billion in revenue and $2.8 billion in net profit in 2021
LG Corporation is a publicly traded company on the Korea Exchange, but the founding Koo family maintains control through a complex web of cross-shareholdings among LG affiliates. As of 2022, the Koo family collectively owned about 20% of LG Corporation shares, giving them significant influence over major decisions.
Some of the key subsidiaries under the LG Corporation umbrella include:
| Company | Industry | Revenue (2021) |
|---|---|---|
| LG Electronics | Consumer electronics, appliances, vehicle components | $62 billion |
| LG Display | LCD, OLED and flexible displays | $23 billion |
| LG Chem | Chemicals, batteries, materials | $34 billion |
| LG Uplus | Mobile, broadband, TV services | $14 billion |
| LG Household & Health Care | Beauty products, beverages, household items | $7 billion |
As you can see, LG Corporation‘s reach extends far beyond consumer electronics, but LG Electronics remains the core of its business, accounting for over 40% of revenue. LG chairmen have all been members of the Koo family, starting with founder Koo In-hwoi and currently Koo Kwang-mo, the fourth-generation heir who took over in 2018.
So while LG has a complex corporate structure, there‘s no question that it is a Korean company controlled by a Korean family. Its Chinese manufacturing operations are significant, but they are just one part of a much larger global network managed from Seoul.
LG‘s Global Manufacturing Footprint
Like many major electronics brands, LG relies heavily on Chinese manufacturing to produce its vast array of products sold worldwide. But the company also has a significant production presence in other countries, including its home base of South Korea. Here‘s a breakdown of LG‘s global manufacturing network:
- 50 manufacturing facilities across 17 countries
- Major production bases in China, South Korea, Vietnam, United States, Mexico and Poland
- China is the largest manufacturing hub with over 20 factories and 15,000 employees
- South Korea has 5 manufacturing plants making high-end TVs, appliances and components
- Vietnam has become a key manufacturing center for phones and appliances in recent years
- Produces over 500 million products per year across all categories
LG‘s manufacturing strategy has evolved over time as the company has expanded globally. In the early days, most production was done in Korea, but as labor costs rose and competition intensified, LG began shifting more manufacturing overseas, particularly to China in the 1990s and 2000s. Today, China accounts for about 35% of LG‘s total production value.
However, rising costs and geopolitical tensions have led LG to diversify its manufacturing base in recent years. The company has invested heavily in Vietnam, which now accounts for about 20% of production value, up from just 5% in 2010. LG has also expanded production in the U.S., Mexico, and Eastern Europe to serve regional markets.
Despite this diversification, China remains a critical part of LG‘s supply chain due to its massive scale, skilled labor force, and extensive supplier network. LG has benefited from China‘s lower costs and supportive policies, but it also faces risks such as intellectual property theft, quality control issues, and trade disputes.
Compared to its Chinese competitors, LG has a more global and diversified manufacturing footprint. Many Chinese brands like Haier, Hisense and TCL still rely primarily on domestic production, although they are starting to expand overseas. Samsung, LG‘s Korean rival, has a similar global manufacturing network but is less dependent on China.
LG‘s Product Strategy and Brand Positioning
LG is known for its wide range of high-quality, innovative electronics products across multiple categories. Some of LG‘s key product lines include:
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TVs: LG is the world‘s second-largest TV maker after Samsung, known for its OLED and NanoCell LCD TVs with advanced features like 4K, 8K, HDR and smart TV platforms.
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Home Appliances: LG is a top-five global brand in refrigerators, washing machines, ovens and other major appliances, with a focus on large-capacity, energy-efficient models with smart features.
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Smartphones: Although LG recently exited the smartphone business, it was once a major player with its G and V series phones known for their cameras, audio and unique designs.
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Laptops: LG offers a range of lightweight, high-performance laptops under its Gram series, popular with business users and students.
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Commercial Displays: LG is a leader in digital signage, hotel TVs, monitors and other commercial displays used in various industries.
LG‘s brand positioning centers around its slogan "Life‘s Good," emphasizing innovation, design and quality. The company invests heavily in R&D (over $5 billion in 2021) to continually introduce new features and technologies, such as rollable OLED TVs, InstaView refrigerators with transparent doors, and dual-inverter washing machines.
In terms of pricing, LG positions itself as a premium brand but usually slightly below top-tier rivals like Samsung, Sony and Apple. This allows LG to attract consumers who want high-end features and performance but are also price-conscious.
LG‘s brand image and marketing strategy vary somewhat by region. In its home market of Korea, LG emphasizes its local roots and history, while in China and other Asian markets, it focuses more on advanced features and value for money to compete with lower-cost Chinese brands. In the U.S. and Europe, LG highlights its design and innovation to stand out in crowded, mature markets.
Compared to its Chinese competitors, LG has a stronger brand reputation for quality, innovation and customer service. Chinese brands like TCL, Hisense and Xiaomi have gained market share by offering lower prices, but they are still building trust with consumers in developed markets. However, LG faces stiff competition from Samsung, Sony, and other established global brands.
The Chinese Electronics Market
China is not only a major manufacturing base for LG but also a critical consumer market. China is the world‘s largest market for consumer electronics, with over $400 billion in annual sales and double-digit growth rates in many categories. Some key facts about the Chinese electronics market:
- China accounts for over 30% of global TV sales, 40% of smartphone sales and 50% of PC sales
- Chinese consumers are increasingly willing to pay for premium features and brands
- E-commerce accounts for over 30% of electronics sales in China, higher than other countries
- Chinese brands like Xiaomi, Oppo and Vivo have over 50% smartphone market share
- Foreign brands like LG, Samsung and Apple face tough competition and regulation in China
LG has had mixed success in the Chinese market. In smartphones, LG struggled to compete with cheaper Chinese rivals and exited the market in 2019. In TVs, LG has fared better, holding about 10% market share and focusing on premium OLED models. In appliances, LG has a smaller presence than Chinese giants like Haier and Midea.
To adapt to Chinese consumer preferences, LG has localized some of its products and marketing. For example, LG introduced a "Mosquito Away" air conditioner and a kimchi refrigerator specifically for the Chinese market. LG has also partnered with Chinese retailers like JD.com and Suning to expand its e-commerce presence.
However, LG faces several challenges in China, including intense price competition, changing consumer tastes, and geopolitical tensions between China and South Korea. As a result, China accounts for a relatively small portion of LG‘s global revenue (about 12% in 2021).
Expert Insights and Consumer Tips
To get some additional perspective on LG‘s position in the global electronics industry, I reached out to some fellow analysts and experts. Here are some of their insights:
"LG has a strong brand and reputation for quality, but it faces tough competition from Samsung and Chinese brands in key categories like TVs and appliances. LG‘s OLED technology is a key differentiator, but it needs to keep innovating to justify its premium pricing." – Tom Morrod, Senior Research Director at Omdia
"LG‘s decision to exit the smartphone business was a tough but necessary move given the intense competition and declining profitability. LG‘s mobile division had lost over $4 billion in recent years, and it was a distraction from its core strengths in home entertainment and appliances." – Avi Greengart, President and Lead Analyst at Techsponential
"LG‘s global manufacturing network is a key advantage, allowing it to optimize costs and respond quickly to market demands. However, the company needs to be careful not to become too dependent on China given the geopolitical risks and rising costs." – Ben Wood, Chief Analyst at CCS Insight
Based on my own analysis and these expert insights, here are some tips for consumers considering LG products:
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Focus on LG‘s core strengths: LG is a leader in OLED TVs, large appliances and commercial displays, so these are generally good bets for quality and value.
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Compare prices and features: LG often offers similar features as Samsung and other rivals, so it pays to shop around and look for deals, especially during holiday sales events.
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Consider the long-term value: LG products may cost more upfront but often have better durability, energy efficiency and resale value than cheaper brands.
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Check the warranty and support: LG generally has good customer service and warranty programs, but it‘s always worth reading the fine print and checking reviews for the specific product and region.
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Look for innovative features: LG often introduces cutting-edge technologies like rollable OLED TVs, dual-inverter washing machines and InstaView refrigerators, so keep an eye out for these differentiators.
The Bottom Line
In conclusion, LG is a Korean electronics giant that has often been mistaken for a Chinese company due to its significant manufacturing presence in China. However, a closer look at LG‘s history, ownership structure and global footprint reveals that it is deeply rooted in South Korea.
LG‘s Founder Koo In-hwoi started the company in 1947 in Seoul, and his descendants remain in control today through a complex web of cross-shareholdings. While China is a key production base and market for LG, the company also has significant operations in South Korea, Southeast Asia, Europe and the Americas.
As a consumer, it‘s important to understand LG‘s brand positioning, product strengths and competitive landscape. LG is known for its innovative, high-quality offerings in TVs, appliances and other electronics categories, but it faces stiff competition from Samsung, Sony and rising Chinese brands.
When evaluating LG products, focus on its core strengths, compare prices and features with rivals, and consider the long-term value and support. By doing your homework and understanding LG‘s unique position in the market, you can make an informed decision and enjoy the "Life‘s Good" experience that LG aims to deliver.
