All set to overtake Whirlpool, LG Vying for the top in sales

LG Electronics outstripped its U.S. rival Whirlpool in sales in the first half of 2021 by more than 1.5 trillion won. Many pay attention to whether the Korean home appliance make will be able to hold on the leading position until the end of the year. LG has thus far suffered defeats in its struggle to become the top player in the home appliance market due to Whirlpool’s Black Friday deals offered in every November.

Whirlpool reported Thursday sales revenue of 5.324 billion dollars (approximately 5.9694 trillion won) and operating profit of 683 million dollars (approximately 765.8 billion won) in the second quarter, hovering far above the market consensus (5.5 billion dollars). Whirlpool’s strong Q2 results are attributable to high growth in demand mainly from the North American market, combined with one-time profits from the sale of its stake in Whirlpool China and its wholly owned subsidiary in Turkey.

Despite Whirlpool’s earning surprise, LG Electronics is expected to claim the No. 1 title in the home appliance market in the first half of 2021. Based on the provisional earnings data provided by the LG Electronics on July 7, the stock market has offered estimates that LG Electronics' Home Appliance & Air Solution (H&A) division has reported sales revenue of 13.5081 trillion won and operating profit of 1.5799 trillion won in the first half of 2021, respectively. These figures outstrip Whirlpool’s sales revenue of 11.9385 trillion won and operating profit of 1.4543 trillion won in the same period.

Eyes are on whether LG Electronics will be firmly established as the No. 1 home appliance manufacturer by the end of the year. LG Electronics’ H&A division first overtook Whirlpool in 2017 in terms of operating profit and has been widening the gap since then but has always lagged behind in terms of sales.

Also in 2020, LG Electronics was leading the market until the first half of the year by reporting sales higher than Whirlpool’s by more than 470 billion won, but it yielded its position to the U.S home appliance maker by falling behind in sales by approximately 940 billion won just in the fourth quarter, mainly attributable to Whirlpool’s November Black Friday deal which drove up the demand.

Nonetheless, both insiders and the public view that this time is different. The sales revenue of LG Electronics already far outstrips that of Whirlpool by 1.57 trillion won, approximately 2.6 times higher than the difference of 590 billion won the previous year when Whirlpool was positioned ahead of LG.


will@donga.com