Samsung Electronics' Device eXperience division may receive an unexpected second-quarter boost after its Thank You Festival drove stronger-than-anticipated demand for appliances, TVs and mobile devices in Korea, industry sources said Sunday.
The DX division encompasses Samsung's smartphones, TVs and home appliance businesses.
Samsung initially allocated around 400 billion won ($262 million) worth of digital Onnuri gift certificates to the campaign, which ran from June 8 through Sunday, according to people familiar with the matter. The government-backed vouchers can be redeemed at traditional markets and small merchants.
Under the promotion, customers purchasing eligible Samsung products — including home appliances, TVs, smartphones and tablets — received digital Onnuri vouchers worth 20 percent of the purchase price.
The initial voucher allocation implies roughly 2 trillion won in eligible product sales. Industry sources, however, said actual sales may have exceeded that figure as Samsung Stores nationwide saw a surge in customer traffic during the campaign.
The timing could prove favorable for Samsung's second-quarter earnings, as most purchases were made in June and are expected to be reflected in April-June results.
The impact on the Mobile eXperience division, which oversees smartphones and tablets, is expected to be limited due to its heavy reliance on overseas markets. However, benefits could be more significant for the Digital Appliances and Visual Display divisions, which depend more heavily on domestic demand.
Analysts estimate combined second-quarter sales for Samsung's appliance and TV businesses at around 14 trillion won. If the promotional demand is fully reflected, the divisions could outperform market expectations.
Samsung's TV and appliance businesses have faced pressure from weak consumer sentiment and sluggish replacement demand.
The promotion appears to have pulled forward purchases from consumers who had delayed upgrades, while also persuading shoppers considering rival brands. Foot traffic at Samsung Stores rose more than 75 percent on average from precampaign levels, according to industry estimates.
Still, industry watchers cautioned that the sales boost could come at the expense of demand later this year, as a significant portion of replacement demand may have been brought forward into the second quarter.
By Jie Ye-eun (yeeun@heraldcorp.com)
