From TVs and refrigerators to washing machines – the South Korean manufacturer LG offers a wide range of devices. But how did the company actually get so big and who is behind it?
Nokia, the inventor of the iconic 3310 mobile phone, tried to conquer the world with rubber boots and bicycle tires in its early entrepreneurial days. The story of the conglomerate LG from South Korea begins in a similar way. LG today symbolizes the slogan “Life’s Good”. Originally, the two letters stood for Lucky Goldstar for a long time. Wait a minute, gold star? It’s probably starting to dawn on some of the older semesters. This brand has long been one of the world’s leading providers of consumer electronics. But first things first: “Lucky Cream”, a face cream, is at the very beginning.
Start as a cosmetics company
In-hwoi Koo founded the company ‘Lucky Chemical Industrial Co.’ in 1947 to bring his newly developed facial cosmetics to the public. The cream, which is supposed to make facial skin softer, quickly became a bestseller for the family business.
However, the company is looking for suitable packaging for the white miracle cure right from the start. At that time, in the early 1950s, plastic packaging production was making great strides. Since creams and plastics largely consist of the same raw materials, Lucky Chemical produces the plastic itself.
The company has not only found a suitable jar for its face cream, but is also expanding its own product range to include other items such as bathroom decorations, combs, soap cups and toothbrushes. In the 1950s, Lucky Chemical did extremely good business with these and other bathroom items.
Goldstar – the new star in the sky
It’s the boom years. New products are constantly coming onto the market. Radios and TVs in particular are enjoying growing demand worldwide. A lot of plastic is also needed to build the new receivers. Lucky Chemical suddenly senses business potential here.
However, the family business is not content with just supplying the plastic for the manufacture of the devices. The company directors also hire the necessary technicians and build the new stars in the entertainment electronics sky themselves. It makes sense that Lucky Chemical chooses the name Goldstar for the newly founded subsidiary.
From the 1960s, the company initially focused on the production of radio receivers. Goldstar later covers the entire range of consumer electronics with televisions, video recorders and cameras.
At some point, the domestic market is no longer sufficient. Like many other Asian companies, Goldstar expands in the 1970s and increasingly conquers the European and US markets.
The birth of LG Electronics
At this point, the South Koreans are still producing their classic plastic products. However, the subsidiary Goldstar now accounts for the majority of sales. In addition to hi-fi and video equipment, refrigerators, washing machines and vacuum cleaners are now appearing in shops under the Goldstar brand name.
In 1995, the company decided to change its name in order to bring these various electronic devices under one roof. The South Koreans choose the name LG Electronics.
The two letters L and G appear for the first time in the company’s history. LG initially stands as an abbreviation for Lucky Goldstar. For marketing reasons, the name changes again in 2005. Since then, the company has associated the letters with the slogan “Lifes Good”.
How LG bought a URL dearly
By the way, there has been a long-standing dispute on the Internet about L and G. Because the group initially operates under www.lg.net, only the second-best solution for being found online. The much better URL www.lg.com has long belonged to the then renowned US architects Lockwood Greene.
When the architects sold the domain in 2008, British footballer Andy Booth did not hesitate and acquired the domain that had become vacant. Allegedly, the Huddersfield Town football team would like to establish a football site on the Internet under the URL. In order to sell this to the outside world in a reasonably credible way, the footballer gave the abbreviation LG the name “Life Games”.
However, this story is more likely: Andy Booth knows about the profit margin when trading certain domains. Presumably, the footballer has followed very closely how long LG has been trying to acquire the rights to www.lg.com.
As a result, the URL actually turns out to be a profitable source of money for Andy Booth. Because in 2009, LG made the footballer an offer that he couldn’t possibly refuse. The media reports “of the most expensive domain transaction in history”. As usual in sport, transfer fees are of course not discussed. But it is certain that a six-figure sum went over the table when the domain was sold.
Also read: Switch off advertising on the LG TV – that’s how it works!
LG smartphones remain only an episode
In the meantime, however, LG is probably paying such an amount out of petty cash. Because global sales have long been in the double-digit billion euro range. In addition to consumer electronics products, CD-ROM drives, notebooks and PC monitors have also contributed to this enormous success. From the mid-2000s, LG also tried to compete with its own country in the field of mobile phones. Back then, Samsung didn’t have the dominant market position that the company holds today.
For a long time, both providers were on an equal footing. But Samsung manages to conquer relevant markets much faster than LG with an aggressive product policy and constantly new smartphone models. Therefore, in 2021, LG made the decision to exit this business.
Also read: 5 smartphone features that were a mega-flop
LG has its sights set on the future
Nevertheless, today’s LG Group is one of the five largest South Korean companies and belongs to the group of so-called Jaebeols. That’s the name of a large family business in South Korea, which mostly consists of different divisions, or in short: a conglomerate.
What started more than 70 years ago as a small family company and a face cream is now a global company network that supplies people in all walks of life with products. And the story is far from over. Because LG is constantly reinventing itself. The South Koreans are already looking to the future and targeting the next businesses: electromobility and robotics.