From a grocery store to a tech giant: The untold story of Samsung
What phone do you use? Chances are that it is Samsung. Starting from phones and TV to refrigerator, music system, laptop, AC and microwave, there is hardly an electronic appliance for which Samsung isn’t our top choice. Now imagine that same Samsung selling noodles, say to your great grandfather, if he stayed in Korea, that means! You can’t make a connection, right? Well, you are not to be blamed here. Of course, you are not aware of the humble beginnings of this multinational, multiproduct conglomerate that it is today. Let us take you through its history and evolution.
Origin as a grocery store
With only 30,000 South Korean Won (about US$27), Lee Byung-Chull, a local businessman in South Korea, started Samsung as a small grocery trading store in Taegu, Korea. The year was 1938. He originally named his firm ‘Samsung Sanghoe’, the Korean term for “three stars.” Lee bought noodles, dried fish, vegetables and other products and exported them to China. That is where it all started.
1950s: Rebuilding and diversifying after war
In the early 1950s, after the Korean war, Lee expanded his business into textiles and opened the largest woollen mill in Korea. Since the country was left war-trodden, Lee focussed heavily on industrialisation to help his country re-develop itself. The policies of the new protectionist government shielding local businesses from competition and providing easy financing also acted favourable for his business. Diversification became a successful growth strategy for the company. By the late 1950s, it had acquired three of Korea’s largest commercial banks, an insurance company as well as some cement and fertiliser making companies.
1960s: Foraying into electronics
In the 1960s, Lee acquired more insurance companies as well as an oil refinery, a nylon company, and a departmental store. However, it wasn’t until 1969 that Samsung entered the electronics industry opening several divisions within the company. The first electronic product the company made was black-and-white television.
1970s: Samsung subsidiaries
During the 1970s, the company expanded its textile-manufacturing processes. It started producing complete line of production — from raw materials to the end product — to compete better. By the mid-1970s Samsung started manufacturing many products in the electronics segment such as washing machines, refrigerators, air conditioners and semiconductors before creating and mass-producing colour TVs while continuing its black and white models. It also began to export home electronics products overseas.
Not wanting to be left behind in other burgeoning industries, it established new subsidiaries such as Samsung Heavy Industries, Samsung Shipbuilding, and Samsung Precision Company in the heavy industry segment. At the same time, it started to invest in the chemical and petrochemical industries. An aerospace division was also created.
However, despite being a major manufacturer in South Korea, Samsung was known more for making cheap, shoddy electronic household items that broke quickly.
Samsung as we see it today
The late 1970s and early ’80s saw rapid expansion of Samsung’s technology businesses and it quickly became a leader in information technology services. Sadly, in 1987, Lee passed away when his son, Lee Kun-hee, assumed the company’s control. But by the 1990s, Samsung was the one of world’s leading companies in electronics and shipbuilding.
After Kunhee took over, the company grew in leaps and bounds. It started taking over companies that developed technologies for its electronic devices. It also expanded its offerings in medical technology, OLED displays, smart TVs, printing solutions, cloud solutions and artificial intelligence. By 2015, Samsung had more than 7,500 utility patents granted in the US before the end of the year.
Today, Samsung has become one of the most recognisable names in technology and is highly renowned for its electronics and home appliances in all its industries. It accounts for about a fifth of South Korea’s total exports. In fact, more than 15% of South Korea’s GDP comes from the Samsung Group.