50% B2B BY 2025

Spain 2019 | ICT & MEDIA | VIP INTERVIEW

TBY talks to Jaime de Jaraíz, CEO Spain & Portugal of LG Electronics, on over 20 years of operations, AI technology, and the challenge of competition.

How has the company evolved over the years in Spain, and what are its main products and activities?

LG Electronics started in Valencia in 1996. We started humbly, with only 15 members, and progressed to the point where the average household in Spain has four LG products, and there are 15 million houses in the country. Our main businesses are consumer electronics, home appliances, telecom, and B2B (which includes Air Conditioning, Solar and Signage). We are either number one or two in the main categories. The only category for which we are not number one or two is mobile, though we are number five in this area. We are well consolidated and are perceived as the preferred brand in most the businesses we operate in. We are working to democratize innovation and technology by bringing state-of-the art technology to the point where almost 100% of the population can access it. Our B2C business is bigger than B2B; in Spain and Portugal, around 20% of our business is B2B. Our aim is to be at 50% by 2025. This area is growing by high double digits every year, and we expect to maintain this growth until we reach 50-50.

What is LG's most innovative product right now?

We have a great array of innovative technologies. One of the most innovative is our AI technology, as well as our ThinQ platform and our Web Os smart TV line. We are the market leader in smart TVs in Spain and many other places, and the difference between our smart TV and others is the usage. 90% of the smart TVs we sell are in use, while our competitors average around 50%. Our technology is significantly better and safer than our competitors, our smart TV being the only one certified for cybersecurity. We are in the business of efficiency, which is why we are that strong in B2B. We help companies become more efficient across the country. In the transition to digital business, we help many companies make their operations more efficient, and technology is essential for this. We are also one of the top five companies in the world in terms of green technology investment. In Spain, we entered in Solar market early in 2019. We are also number one globally for battery production and self-driving technology, breaks, info-tainment systems, and so on. In the GM Bolt, LG makes 65% of the components. Our business model is to help existing brands and to partner in order to enter the new electronics era.

Do you have a strategy to push forward your mobile products to become a leader in the product area?

Our aim is to lead every category we operate in. In mobile, we are improving in the market. Our aim is to get closer to the top of Spain in the coming years. We are excited about 5G and believe this will provide a big push for our business. We also have other state-of-the-art technologies like Time of Flight (TOF), which allows people to interact with the phone without touching the screen.

Why is LG not already dominating the market?

There are several issues. The market one focuses on has a large impact, and we focus more on certain markets than others. This means sometimes our products for one market are not suitable for another market. We are constantly evolving and developing more region-specific strategies, and I am certain we will improve our position in the coming years.

What measures will the company take to make itself more sustainable and build sustainable products?

We have the LG Smart Green program in place for just this sort of thing. This program was developed in Spain, though it was already activated in the mother company in Korea. LG is one of the top five companies in the world in terms of green energy technology and sustainable investments. Our business is efficiency at all levels and in all things. We have applied many of these things to the market in Spain in order to create an additional story. One of the first decisions we made in Spain in 2018 was to challenge ourselves to reduce our CO2 emissions by 55,000 tons. The company as a whole was doing 30 million tons of CO2 reduction, meaning we are just one facet of a global LG strategy. Our factories, products, packaging and everything else is planned with the intent of becoming greener.

How has LG committed to energy efficiency over the years?

We have been talking about efficiency for over 20 years, and we are number one in efficiency in every category. This is our business: to make life more efficient; however, it is not only about efficiency, and this is where the next step of our Smart Green mission comes in. In 2019, LG Spain will be the first company to plant 1.5 million trees using technology such as drones. We aim to lead a movement to plant 47 million (one per every Spaniard) trees a year in Spain. We want all brands and the global community to join us, because real change must be achieved. This aligns perfectly with our corporate strategy and goals. There is a great deal of innovation that improves people's lives in the short run but will undermine them completely in the long term. We, however, are in the business of making life better for people in the short, medium, and long term. Our main theme is that life´s good, and to create Innovation for a Better Life and for a Better Planet and we want to work to keep it that way.