LG to sell liquid screens in Japan


LG Electronics and rival Samsung are promoting their screens heavily and are two early winners out of the World Cup

By Alex Frew McMillan
CNN Hong Kong

SEOUL, South Korea (CNN) -- South Korea's LG Electronics and Japan's Aeon Co. have reached a deal to sell high-end television screens.

LG Electronics is developing a liquid-crystal screen exclusively for Aeon for sale in Japan. Aeon is Japan's second-largest retailer.

It is the first development deal between the two companies. It also sets LG Electronics against Japan's incumbents such as Sony.

The sets will cost 20 percent less than competing Japanese brands. One Aeon spokeswoman said that Japanese consumers aren't attached to domestic brands as they were.

"There are fewer customers saying their electronics products must be made by a Japanese brand, especially among the younger ones," she told Reuters news agency.

Exclusive screen made by end of year

Seoul-based LG Electronics is Korea's second-largest electronics maker, after Samsung Electronics.


LG Electronics would see its liquid-display screens selling at 20 percent less than its competitors in Japan

LG Electronics makes flat-screen televisions, regular TVs, monitors, DVD players and MP3 players, among other products, and also owns Zenith Electronics.

LG will develop a liquid-display screen exclusively for Aeon by the end of Aeon's business year in February 2003.

LG and Aeon also plan to sell plasma-display televisions and DVD players in Japan soon, the Asahi Shimbun stated.

Aeon said the deal with LG Electronics will see it ramp up sales of the Korean company's goods from 200 million yen ($1.6 million) now to 5 billion yen ($41.6 million) by the end of 2004.

LG Electronics and Samsung Electronics are the two biggest corporate winners out of the soccer World Cup tournament, according to Terence Lim, head of Korean research for Goldman Sachs.

Greater cooperation between Korea-Japan

Lim predicted that the soccer tournament will lead to greater cooperation between Korean and Japanese companies (full story).


The company gave a demonstration of its video phones during the opening ceremony of the tournament, on May 31

LG Electronics and Samsung also benefited from strong sales of their plasma and flat-screen televisions during the tournament.

The success of the Korean national team, which finished fourth, drew new Red Devil fans to watch the games at home.

LG gave a demonstration of its display screens and its video phones during the May 31 opening ceremonies in Seoul World Cup Stadium, using wideband CDMA technology (story on Korean CDMA).

Business relations have often been frosty between Japan and South Korea. The two nations have been military enemies and were closed for all but internal business at times in the past.

Heavy LG expansion outside Asia

But the threat of competition from China, as well the soccer World Cup, has driven business cooperation.

Asia generates only 38 percent of LG Electronics sales. It has been expanding heavily in Europe and North America. It started life under the name Goldstar, now one of the LG Group's 70 member companies.

Aeon, based in the city of Chiba, owns franchise stores around the world. It has more than 300 Jusco, Maxvalu and Megamart stores, mainly in Japan.

It also runs The Body Shop and Laura Ashley stores in Japan, has a joint venture with the Sports Authority and runs a drug-store chain.

One of its group drug-store companies posted record sales on Wednesday, sending its stock soaring on Thursday (full story).

Through the development deal, LG hopes to boost its exposure in Japan. Aeon aims to undercut its competitors' prices.