Samsung reaches beyond smartphones with home appliances
07/03/2014 9:54 PM
07/03/2014 9:54 PM
At a chic gathering in Manhattan, a group of Michelin star-rated chefs — the creme de la creme of cuisine — were whipping up gourmet appetizers for a crowd of more than 100 people, mostly members of the press.
Celebrity restaurateur-chef Daniel Boulud, for example, made Colorado Wagyu ribeye wine-braised short ribs. The culinary offerings from the other chefs included duck foie gras royale, accompanied by champagne. And all the cooking was done in a demonstration kitchen outfitted with Samsung’s Chef Collection line.
Samsung Electronics America Inc., the U.S. unit of the South Korean electronics giant, was the host of the evening party last month that gave reporters a close-up look at Samsung’s latest line of home appliances.
The party was serious business. Long an industry leader in TVs and later smartphones, Samsung has turned its attention to “white goods”: refrigerators, clothes washers and dryers, dishwashers and ranges. And it’s making solid inroads against leaders such as General Electric, Whirlpool, Kenmore and others as it sets its sights on being No. 1 in that category as well.
Samsung is grabbing market share with a combination of technological innovation and stylish design in what the company says had been a stagnant sector ripe for change. Part of the strategy is offering higher-end products that aren’t as pricey as luxury brands such as Viking, “premium mass-market” appliances that are getting rave reviews and winning industry awards.
“Definitely, the Samsung brand has come a very long way in the past 10 years,” said Alan Wolf, a senior editor at Twice magazine, a trade publication that covers the consumer electronics industry. “Samsung was very focused, very concentrated and very determined.”
This year, Samsung, which bills itself as America’s fastest-growing appliance company, ratcheted up its product introductions, with its largest launch to date. The company, which thinks its prominence in TVs and cellphones will have a halo effect on consumers for its home appliances, is promoting its new refrigerators and other products with its biggest marketing campaign, run out of Ridgefield Park, N.J.
The home appliance debuts include new additions to the Chefs Collection — which incorporates suggestions from members of Samsung’s Club des Chefs such as Boulud — and includes a four-door refrigerator with metal cooling plates to prevent temperature fluctuations, and a dishwasher with Water Wall technology, a sweeping spray of water that shoots up from the bottom of the appliance and moves back and forth, rather than conventional circular water jets, which can miss cleaning dishes in corners.
“Essentially, we’re changing the way that we clean dishes,” Kevin Dexter, senior vice president of home appliances for Samsung’s U.S. unit, said at his presentation. “Over the years, dishwashers have been trying to fit a round peg in a square hole, or in more technical terms, conventional rotary water jets in a box-shaped dishwasher.”
Apart from the Chefs Collection, Samsung has shown new models of its Food Showcase refrigerators, which feature an exterior door for easy access to frequently used food items, such as beverages; large-capacity, 30-minute quick-speed washers; and even a compact Baby Care washer, to clean and sanitize infants’ diapers separate from adult loads.
Tim Baxter, president of Samsung Electronics America, said that the company saw an opportunity to “bring some innovation, some design, some speed” into a home appliance market “that was, we felt, fairly stable” and “even stagnant.”
The market’s growth stalled and declined during the Great Recession, only recovering and starting to grow again last year, said Eric Voyer, a vice president at TraQline, a market research company.
Samsung has tough marching orders from corporate headquarters in Seoul: for the company to become No. 1 globally in home appliances, in terms of revenue, by 2015.
“It seems a very challenging target for them,” said Dinesh Kithany, a senior analyst for home appliances at IHS Technology who follows Samsung globally. “It’s quite ambitious. I’m not saying it’s not possible. They have the power. They have the brand name. I’m sure they can fight the stalwarts like Whirlpool. I think they’ve grown very nicely across the globe.”
Domestically, Samsung is No. 5 in revenue for major home appliance sales, with 10.7 percent of the market at the end of the first quarter this year, up from 6.7 percent four years ago, according to TraQline. Its survey ranks General Electric No. 1, at 15.4 percent; followed by Whirlpool, at 15.2 percent; Kenmore, at 14.7 percent; and LG Electronics USA Inc., at 13 percent. The U.S. home appliances industry is a $26.5 billion-plus business, according to Twice research partner Stevenson Co.
And Samsung has its hurdles. Unlike its American rivals, it doesn’t have U.S. manufacturing facilities, Kithany noted. And Samsung trails Whirlpool, Kenmore and others in terms of brand recognition in home appliances, Voyer said.
But Baxter is undaunted.
“We have grown to over $228 billion, Samsung Electronics this past year, globally,” Baxter said. “We have aspirations to continue that type of growth.”