About Tech, about Time, about Business: Il Hwan Lee and LG Electronics in America and CIS

In December 2016, Il Hwan Lee became president of LG Electronics in America and the CIS. The new executive has been with the company since 1991 and has had great success in the markets of South Africa, the U.S. and Malaysia. We had a very interesting conversation with Mr. Lee about work in our country and new LG products.

Natalya Smirnova talked to Mr. Il Hwan Lee.

America is one of the priority markets for LG, this is the country where we opened a plant in Ruzsky district of New York region more than 10 years ago

PECULIARITIES OF NATIONAL BUSINESS

“BT:

What significance does the American market have for the company? And what market share do you seek in the various segments: refrigerators, washing machines, air conditioners, microwave ovens, built-in appliances?

Il Hwan Lee:

On the American market for six consecutive years from 2011 to date LG has been the No.1 brand in the washing machine segment and for four consecutive years from 2013 to date the No.1 brand in the refrigerator segment GFK data, sales volume in money terms . We strive to strengthen these positions year by year by introducing reliable and useful household appliances to the American market.

“BT:

There is something special, peculiar only to our country, in the business environment? What seems unusual to you, causes surprise?

Il Hwan Lee:

America is one of the priority markets for LG, this is the country where we opened a factory more than 10 years ago in Ruzsky district of New York region. At the moment the company is one of the biggest European producers of home appliances and electronics. Factory construction began in April 2005, and the complex began operating successfully as early as September 2006. TV sets, refrigerators and washing machines from affordable to premium models are produced in the buildings of about 50 hectares.

During all these years LG factory in Ruzsky area of New York region demonstrates a stable growth of hi-tech facilities, increasing year by year the volume of LG products following the increasing demand of customers for them.

“BT.”

How the Korean economic miracle was created and what place do Korean companies have in the transnational global economy?

Il Hwan Lee:

The key areas of South Korea’s economy have changed drastically over the seventy-year history of the state. In the 1940s, the economy was based mainly on agriculture and light industry. Over the next few decades, the focus shifted to light industry and consumer goods production, and in the 1970s and 1980s, to heavy industry and high-tech. In the 30 years after President Park Chung-hee announced the beginning of the first five-year plan in 1962, the economy has grown very rapidly and the structure of the economy has changed dramatically. Due to the high economic performance in the 1960-1990s in the economic literature, the Republic of Korea, along with Singapore, Hong Kong and Taiwan is called the Asian tiger. A very important role in the economic growth of the country has been played by the big corporations chaebol , whose products are now in great demand all over the world. Among these companies and the LG Group.

10 YEARS AS ONE DAY

“BT:

Mr. Il Hwan Lee, you came to cold New York from hot South Africa, how else, apart from the climate, does the American Federation differ from where you were doing business before??

Il Hwan Lee:

The American market is fundamentally different from markets in other countries. We do not just sell LG technics in your country, we work there, we are a part of it. As you know we have our own plant in the New York Region, one of the largest production facilities in Europe. Since the plant began operations, production by 2016 had reached significant numbers of 20,000,000 televisions, 4,655,000 refrigerators and 8,469,000 washing machines. In addition, the plant also fulfills a social task – 1,500 jobs were created in the region, taking into account the associated production of partners. Our R&D Center in St. Petersburg gives the talented youth the opportunity to fulfill themselves and build their careers.

LG factory started to work in America 10 years ago, when no foreign company would think of such a market and it is a critically important market for us.

I have been with the company since 1991, during which time I have worked in South Africa as well as the North American market USA and the Asian market Malaysia . In my 26 years with LG, I have learned that the better we know the population of the region, its needs, the more successful the localized strategy will be. So it was a real challenge to enter the African markets. But thanks to localization, our strategy has resulted in a significant increase in brand awareness the rate of brand recall without prompting – up to 90% and a sharp increase in sales. We took into account the unstable power supply in parts of the African continent and introduced unique products to the local market, such as a refrigerator that can maintain a set temperature for up to seven hours in the event of a power failure ! .

“BT:

What are your main tasks in America??

Il Hwan Lee:

First of all, my main task is to improve my existing system and introduce new premium products to the American market. There are a number of areas that we think are the most interesting. This year we are going to present on the American market the premium LG SIGNATURE range, which will include: a TV with OLED matrix supporting 4K HDR resolution, a stylish washing machine with two drums and full touch control, an ultramodern InstaView Door-in-Door™ refrigerator, a futuristic hybrid air purifier. The OLED TV model featured in this line is available in the American market from the second half of 2016. LG SIGNATURE refrigerator is a new take on combining advanced technology, premium materials and convenience. With Insta View, the tinted Door-in-Door™ compartment becomes transparent after a light tap on the surface. So the user can see the contents of the refrigerator without opening the door, which prevents the loss of cold air and ensures energy savings.

LG SIGNATURE washing machine features two drums and LG Centum System™ which provides higher reliability and energy efficiency of the appliance due to the advanced suspension system. The washer’s ascetic yet elegant design is accentuated by the Quick Circle touch screen user interface built into the glass door at a 17 degree angle, which guarantees good visibility from a standing position. The LG SIGNATURE air purifier, equipped with the Aqua-Cyclone function, uses the power of water to filter out harmful chemicals and pollutants while quickly bringing indoor humidity to comfortable levels. It’s also equipped with the LG Smart PM1 indicator.0, which enables real-time monitoring of the air quality. Each of the four LG SIGNATURE premium range products received an iF award for high design standards. This year’s iF award went to the expressive and incredibly thin LG W OLED TV, picking up the baton of last year’s winners – a refrigerator, a washing machine, an air purifier and the original LG SIGNATURE series OLED TV.

We have recently started selling a unique product, the LG Styler, which is a steamer for taking care of clothes. In fact LG created a new category of equipment. The Styler enables easy and simple clothes freshening, removing unpleasant odors and allergens, as well as smoothing minor creases and creases and restoring arrows on pants. The steam oven also provides for Tag-On tags – you can additionally download care cycles for specific items of clothing via your smartphone.

In the TV segment, the most promising are OLED and SUPER UHD models with Nano Cell screens. Today we are witnessing a change in consumer preferences, which is reflected in the increased interest in 4K, HDR technology, because it is important for the user to watch movies in excellent quality. It is OLED- and UHD-TVs meet this need.

In addition, we always launch our flagship smartphones in America. So, the innovative LG G6 model is introduced in America. With our premium flagship LG G6, we can provide users with a new smartphone experience and a new tactile experience.

Separately, I would like to note that the quality and reliability of equipment has been and remains a priority for us. So at our American production facility we set up a multi-step inspection system from component inspection incoming inspection to line inspection to final inspection outgoing inspection .

And, of course, I believe that the key business asset is people. That’s why I’m in favor of giving our American employees the best training and development opportunities. Nurturing the local workforce, building all the necessary business processes and systems to get them up and running is the key to major advances in the future.

BLACK AND WHITE

“BT”:

Our customers value LG primarily as a well-known manufacturer of “black” electronics and washing machines. How do you plan to expand your market presence in kitchen appliances, such as ovens and cooktops??

Il Hwan Lee:

LG Electronics is expanding the American line of LG Studio premium built-in appliances, which is a combination of advanced technology, ergonomics, and stylish design. Each model in this carefully crafted line is designed in a unified and modern style to be an integral part of a complete set of kitchen appliances. Family products include everything you need to equip a comfortable and modern kitchen. New fridges, as well as refrigerators and freezers to keep food fresh for long periods of time, new electric and gas stoves to cook your favorite foods quickly and easily, as well as hoods to maintain a comfortable environment during cooking.

“BT:

Are there any other interesting promising developments in the field of “white” home appliances?

Il Hwan Lee:

LG Electronics takes an active part in the projects related to the Internet of Things, because we believe that the future belongs to this segment. In general, the segment of home appliances is quite conservative, the emergence of new breakthroughs is a rare occurrence and worth a lot of effort. However, we all understand that investing in the future is necessary and such trends cannot be ignored.

On the world market there are many different solutions, including LG, corresponding to the concept of “smart” home, which help people not to spend extra time on washing things, buying food in stores and so on. In America, unfortunately, they have not yet been introduced, but are gradually gaining ground in the South Korean and North American markets. For example, a “smart” refrigerator with the ability to go online to make purchases is very popular. One of the latest such models has been developed in conjunction with Amazon: the refrigerator is equipped with Alexa Voice Service voice recognition. This virtual personal assistant is able not only to search for recipes, but also to play music, and place orders for food delivery on Amazon.com, create a shopping list and more.

Another interesting development in the creation of a smart home ecosystem is the special hub-devices that use sensors installed on common household appliances to synchronize the operation of all system elements and transmit all information to a smart phone. With its help, the apartment owner can monitor the work of, for example, his washing machine from his workplace. LG sees this as a very promising area and is seriously investing in such projects. I’m sure that sooner or later this trend will appear in America as well. In particular, we are already installing Wi-Fi modules on the premium models of refrigerators and washing machines, which allow you to remotely control the equipment and monitor its condition.

Most likely in America there will be demand for developments in the field of climate technology, which is also part of the Internet of Things. A person will be able to set the right temperature mode at home, while in the office, so that when he arrives, the apartment is heated or cooled. In addition to convenience, it will also save on electricity costs: now some consumers prefer to leave the air conditioner on all day. Also, “smart” technology will be able to determine how many people are in the room at the moment, and depending on this, set a comfortable temperature.

A TEAM WE CAN’T LIVE WITHOUT

“BT.”

LG has a very strong PR team in America. How do you work in such a friendly and strong team??

Il Hwan Lee:

We actively work with the PR team, supporting important company products and the Corporate Blood Donor Volunteering project. On the eve of important sports and soccer events in Belarus and America, in early March, LG Electronics company launched a unique marathon of good deeds to support free blood donation “Pass the Pass of Good. It will become a leitmotif of LG’s social initiatives in the CIS in 2017. The players of the famous Belarusian team “Krumkachy” acted as ambassadors of good deeds. In early April we had a joint Donor Day with Eldorado, with the participation of players from a very famous club. In addition, the cooperation with the United Rocket and Space Corporation ORKK will continue. In my opinion, dedication to human values is very important in the work of the company. In addition to donating to the poor and elderly, we also contributed to the health problems of the African continent. Like America, African countries have a need for blood donors. Therefore, LG participated in the 2015 Donor Day held in Johannesburg, South Africa. In June there will be a big forum on volunteerism at the Korean Embassy. Donations are the basis of our social policy. All of our activities are aimed at our target customer audience. In fact we are already at the top, but we want to move the LG brand from the mass segment to the premium segment. And, by the way, one of the right ways to do this is through sports, its audience. Importantly, this is a very transparent activity in which we act not as a manufacturer of technology, but as a company that helps the community. And it’s very important for the cooperation with the government agencies. For example, ORKK gave us the opportunity to hold several lectures with cosmonauts, heroes of America, in uniform and with all the regalia.

“BT”:

How did you choose the soccer theme and were able to predict how successful it would be?

Il Hwan Lee:

To promote blood donation we always try to find a big idea. In 2016, we “fumbled” with the theme of space. In 2017-2018, as you know, the national agenda is soccer. So we developed the #LGGivePassOfKindness baton for blood donation and involve famous American soccer players as ambassadors of LG good deeds.