By In a strategic shift, LG Electronics (Thailand) Co Ltd is focusing more on the business-to-business (B2B) market, anticipating that its growth will outpace the consumer market. This move is driven by the country’s economic recovery and the increasing demand in sectors such as offices and hotels. The company aims to leverage this opportunity to expand its market share and drive revenue growth, targeting sales of 16 billion baht this year, a 7% increase from 2023.
LG Electronics is making a significant pivot towards the B2B market, recognizing its high growth potential. The company’s head of marketing, Amnaj Singhachan, highlighted that the economic recovery post-pandemic has led to a surge in demand for B2B services, particularly in the hospitality and office sectors. This shift is part of LG’s broader strategy to diversify its revenue streams and reduce reliance on the consumer market.
The company plans to increase the proportion of its sales from B2B and direct-to-customer (D2C) channels. Currently, the business-to-consumer (B2C) segment accounts for 80% of LG’s sales, while B2B and D2C each contribute 10%. By next year, LG aims to adjust this ratio to 70% B2C, with B2B and D2C each accounting for 15%. Over the next five years, the goal is to further reduce B2C to 50%, while increasing B2B to 20% and D2C to 30%.
This strategic shift is not just about numbers; it’s about positioning LG as a leader in providing comprehensive solutions that cater to various business needs. The company is also exploring opportunities in the air conditioning market, anticipating that the year-end tourism season could drive demand for property renovations in the hospitality sector.
Expanding Market Reach
To support its B2B ambitions, LG Electronics is enhancing its distribution channels. The company distributes its products through three main channels: B2C via dealers and sub-dealers, B2B, and D2C through online platforms like Shopee, Lazada, and its own website. This multi-channel approach ensures that LG can reach a wide range of customers, from individual consumers to large businesses.
LG’s focus on the B2B market is also aligned with its Future Vision 2030, which aims to transform the company into a “Smart Life Solutions Company.” This vision encompasses expanding the customer experience across various spaces, including home, commercial, mobility, and virtual environments. By integrating innovative technologies and solutions, LG aims to enhance its value proposition and strengthen its market position.
The company’s commitment to innovation is evident in its approach to product development and customer engagement. LG is continuously exploring new ways to meet the evolving needs of its customers, whether through advanced air conditioning systems for commercial spaces or smart home solutions that enhance convenience and efficiency.
Challenges and Opportunities
While the shift towards B2B presents significant opportunities, it also comes with challenges. The B2B market is highly competitive, and LG will need to differentiate itself through superior products and services. Additionally, the company must navigate the complexities of B2B sales, which often involve longer sales cycles and more complex negotiations compared to the consumer market.
One of the key challenges is maintaining strong relationships with B2C dealers while expanding the B2B segment. LG plans to continue its partnerships with B2C dealers, ensuring that it can cater to both consumer and business customers effectively. This balanced approach is crucial for sustaining growth and achieving long-term success.
Moreover, the recent flooding in Chiang Rai province has affected some of LG’s local dealers, highlighting the need for resilience and adaptability in the face of unforeseen challenges. In response, LG is considering launching a relief scheme, including not-for-profit repair services for damaged appliances and marketing campaigns with extended installment plans for new purchases.
Despite these challenges, LG remains optimistic about its prospects in the B2B market. The company’s strategic focus, combined with its commitment to innovation and customer satisfaction, positions it well to capitalize on the growing demand for business solutions. As LG continues to evolve and adapt, it aims to set new standards in the industry and drive sustainable growth.