Looking to expand beyond its core business of the manufacture and distribution of home appliances, LG Electronics, based in South Korea, announced several additions to its corporate charter. More specifically, on March 24, 2022, at its Annual General Meeting, shareholders approved 'blockchain-based software' development and 'sale and brokerage of cryptocurrency' as two new areas of business for LG.
Although LG has included the sale and brokerage of cryptocurrency in its business charter, it doesn’t seem to be opening a digital exchange just yet. Replying to a question if the company plans to open a trading platform for digital assets, a company spokesperson said, 'Nothing has been decided yet… We just mentioned business areas in a broad manner'.
[Shrivastav, A. LG’s New Business Plans Include Blockchain and Crypto. (Accessed March 26, 2022)].
LG would face a plethora of regulatory obstructions should it decide to enter the cryptocurrency brokerage arena. But the same would not hold true if it pursued he production and distribution of devices that permit users to view NFTs.
The tech manufacturer has been on a warpath of NFT adoption and integration, announcing earlier this month that it was working with blockchain tech company Kakao’s Ground X to introduce a line of smart TVs that are fully NFT-capable. LG also announced a partnership with Seoul Auction Blue, an online art auctioneer, to carry out further projects related to NFT-based artworks.
[Mitchelhill, T. LG Electronics adds blockchain and crypto as new areas of business. (Accessed March 26, 2022)].
These moves by LG come as its response to rid itself of its unprofitable profit centers. In February, 2022, LG "exited from manufacturing solar panels last month due to heavy competition with price-cutting Chinese suppliers. It entered the business in 2010. The company also made a highly-publicized departure from the smartphone business last year, beset by shrinking market share and cumulative losses of over 5 trillion won ($4.1 billion)" [Eun-Jee, P. LG Electronics adds new corporate charter objectives, including crypto. (Accessed March 26, 2022)].
Samsung, the largest among the South Korean companies, recently announced that it would integrate an NFT Aggregation Platform into a new series of Smart TVs it plans to introduce later this year. This feature will present NFT marketplace data on the users’ TV sets, which can also be used to view their digital collections as well as buy new ones.
[Shrivastav. Supra].
As such, LG's move into the new area of blockchain and cryptocurrency "is in line with the growing trend of top companies aligning their business development goals with emerging technologies" [Id]. And for Samsung and LG, this move is somewhat simplified as a result of South Korea's election of crypto-friendly President Yoon Suk-yeol earlier this month. "With Yoon’s election campaign being centered around deregulating South Korea’s crypto industry as well as establishing initiatives to make the country a future home of blockchain technology 'unicorns" [Mitchelhill. Supra] there will be less hurdles for these companies to jump to achieve their goals.
LG is the fourth largest company in South Korea having reported 2021 revenue growth of 30.6 percent to KRW 17.22 trillion (USD 14.56 billion) with operating profit increasing 18.1 percent over the previous year to KRW 1.1 trillion (USD 929.68 million) [See, e.g. Google. LG 2021 operating profit. (Accessed March 26, 2022).