Samsung China aims to buy supplies worth US$18.5 billion in the
country this year, up from US$15.3 billion in 2005.
China has become the second-largest market and manufacturing
base for the South Korean firm, which faces tough competition in
the Chinese market.
The top South Korean conglomerate has already moved its
international purchasing center from Hong Kong to Shanghai, the
firm said.
The center will co-ordinate 10 separate purchasing offices in
China.
"Price wars in China are bloody and the key to our success lies
in a competitive advantage in terms of cost. We also need a bigger
procurement network," said Keun-hee Park, president of Samsung
China.
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Samsung China, one of the most successful multinationals in the
world's most populous market, recorded total sales of US$25.3
billion last year, including local sales of US$17.1 billion.
Its exports from China also set a new record of US$9.8 billion,
more than four times the 2001 figure.
"To survive in the market, we must respond quickly to changes
and revolutionize our business process and systems," said Park.
At present, Samsung China has about 4,600 suppliers. It has just
launched a new strategy to upgrade its sourcing, supply chain
management and its relationship with suppliers.
It aims to build up suppliers in strategic production areas,
such as mobile handsets and big-screen TVs.
It is also expected to open a website next month to improve
co-operation with suppliers, which will be able to conduct training
and technological support.
Samsung is also looking at other ways to attract good suppliers
to the firm.
LG Electronics, the fourth-largest global mobile phone maker
after Nokia, Motorola and Samsung Electronics, was a second-tier
player in China, but has just launched its popular model KG90.
This has beaten Samsung's phones in the South Korean market over
the past three months. LG has vowed to replicate this success in
China, aiming to sell 1 million units of the model this year.
Meanwhile, Japanese firm Sony cited statistics from the market
intelligence firm Gfk that it is No 1 in the market for LCD TVs
above 23 inches. Samsung also has a strong interest in this
area.
(China Daily April 22, 2006)