What would have happened if a Proton top executive visits rival Perodua showroom, inspects the successful Alza and somehow broke the car’s doors? Perodua would probably accuse Proton of spying on its technology and out of envy damage its car, deliberately. That would be a great badass marketing plan to tell the whole world that even a boss from rival Proton couldn’t resist the temptation of Perodua’s car.
That’s exactly what happens to two bitter rivals in Korea – Samsung and LG. Last September, both Korean giants were at the annual IFA trade show in Berlin, Germany, to show off their smartphones, refrigerators, virtual reality headsets and high-end washing machines. As with other exhibitions, it’s common for researchers to visit and check out rival companies’ products on display.
Mr. Jo Seong-jin, head of LG Electronics home-appliance division, and other executives were checking out competitor Samsung Electronics washing machine. Subsequently, clerks at Samsung Electronics store in Berlin called the police alleging a man broke the doors of four high-end Samsung “Crystal Blue” washing machines. It got so serious that a local police officer was dispatched to the scene of the incident.
Samsung claims it was an attempt to gain a competitive advantage in the appliance business. While acknowledging that a company researcher had indeed been questioned by police, LG had strongly rejected the notion that its researcher was engaged in some kind of low-level industrial sabotage. The appliance at the center of the storm is Samsung WW9000 front load washing machine with crystal blue door, which retails for about US$2,700.
LG doesn’t dispute that Mr. Jo and other executives were checking out the competition in Berlin, but said that if the washing machines were indeed broken, it was because of the poor quality of Samsung’s door hinges. However, after some confusion and argument, LG agreed to buy the washing machines in order for Berlin police to close the case and to resolve the situation.
Samsung filed a lawsuit later in September anyway, seeking the help of South Korean prosecutors, citing property damage and defamation. The company claimed it had footage of a similar incident also involving LG employees vandalizing Samsung products in Berlin. LG then countersued Samsung, complaining about alleged defamation and possible evidence tampering.
In December, Korean prosecutors raided the offices of LG in connection with the case and temporarily barred Mr. Jo from leaving the country. Now, he is officially charged by Seoul prosecutors for allegedly vandalizing Samsung washing machines. Beside chasing the mouth-watering appliance market pie worth an estimated US$400 billion globally last year alone, Samsung and LG have been fighting tooth and nail to be the leader.
After the indictment, LG took the dirty laundry war to YouTube, posting a nearly 9-minute video in defense of its employees, who have maintained their innocence. The video shows what the company said was surveillance footage from the trade show of its employees obtained from German authorities. In the video, Mr Jo is seen closing the door hard on a machine several times.
However LG said that the action did not produce the same kind of damage described by Samsung in its photo. Mr Jo also can be seen pulling down on the door of one Samsung refrigerator hard enough that it swayed – with Samsung promoters watching from several feet away. When the LG team left the event, the Samsung promoters appear to inspect the refrigerator but did not raise any objections at that time.
Previously, both were fighting over their respective refrigerator capacity, follows by claims over South Korea air conditioner market share. LG also claims it is the world’s largest maker of washing machines, to which Samsung disputes, of course. Subsequently, Samsung declares it outsells LG in domestic refrigerator market – a claim LG disagrees. For decades, Samsung and LG have competed in almost every appliance you can think of.
Would LG stoop so low that it couldn’t care but walked straight to Samsung washing machine display unit and start damaging it? Most importantly, how could LG be so dumb that it sent its top executive to do such a low-level sabotage? Surely they could afford some loose change to get some strangers or thugs for such vandalism. Or perhaps Samsung tries to insult consumers’ intelligence with such dramatic marketing attempt?
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