Samsung enters world of fashion
Updated: 2012-08-20 10:10
By Tuo Yannan in Seoul (China Daily)
Firm known for electronic devices aims to diversify in China by selling clothing
Samsung Group, South Korea's largest company by sales revenue and a leading global smartphone maker, is diversifying into the clothing industry with a plan to sell garments in China.
A Samsung 8ight Seconds store in Myung Dong, a popular shopping area in Seoul, capital of South Korea. The company said it will open 8ight Seconds outlets in China in 2014. It will be the first overseas outlet opened by the brand store. [Photo/China Daily]
The company already has a successful business in electronic devices in China, which gives it a solid foundation for it to expand into other areas in the Chinese market, said the company's high-level executives.
Samsung sold more than 50 million smartphones during the second quarter of this year, making it the world's biggest by sales volume, according to the US-based IT research company International Data Corp.
Most Chinese customers know about the company's popular handset Galaxy smartphones, but few know about its Galaxy garments.
Samsung Group is a big conglomerate, a parent company of more than 30 subsidiaries that produced about $220 billion in net sales last year. In addition to Samsung Electronics Co, the company's and South Korea's biggest individual company, Samsung Group also has business in industries including insurance, clothes, theme parks and hotels.
Samsung Group plays a huge role in the nation's economy. Last year it contributed more than 20 percent of South Korea's gross domestic product. The company has more than 300,000 employees worldwide. About one-third of them are in China.
However, with slowing economic growth, diversifying and tightening its business in China has become more important to the company. Last year, Samsung Electronics announced the launch of its 75-inch 3D TV ES9000 in South Korea. It will introduce the product to China by the end of August. It started to sell its latest Galaxy III smartphone in the Chinese market a few months ago.
Samsung Group's clothing brand, 8ight Seconds, has also announced it will enter the Chinese market - in 2014 - after the conglomerate built up its brand reputation through its electronic devices.
According to the company, China will become the first market outside South Korea for 8ight Seconds.
"Our target is to open 12 outlets by the end of this year and enter the Chinese market in 2014," said Song Tai-keun, manager of 8ight Seconds. He said the brand has five shops in South Korea.
Chinese tourists are another target for Samsung's theme parks, hotels and duty-free shops. Samsung Everland Inc, Korea's biggest resort complex, includes the Everland theme park, Caribbean Bay water park and Glen Ross golf club, is trying very hard to get more Chinese customers.
Since 2010, Chinese visitors have enabled a 30 percent annual growth rate at Sansumg's theme parks. More than 400,000 visitors from the Chinese mainland, Hong Kong and Taiwan went to Everland theme park last year. The park has golden (or snub-nosed) monkeys given by China.
Last year, about 2 million Chinese tourists visited South Korea, a 23.6 percent growth rate year-on-year.
"Now Chinese visitors represent about half of our overseas customers," said Kim Sang-min, sales manager of the resort. He said in order to attract more Chinese customers, the park has added Chinese language guides and invested heavily in building good relationships with Chinese travel agencies. He said in the first half of 2012, Chinese customers increased 57 percent year-on-year.
In March, as the first South Korean duty-free shop registered on the Chinese micro blog Sina Weibo, Samsung's Shilla has more than 80,000 fans already. It announced a target this year of achieving a rise in sales of more than 40 percent year-on-year.