Daybreak After a blockbuster IPO, LG faces a tougher test — selling luxury without losing loyalty
Oct 27, 2025
LG's record-breaking IPO saw massive investor enthusiasm, driven by its strong consumer electronics dominance. The company’s long-term relationships with retailers, built on trust and generosity, face challenges as it shifts towards premium products. This transition could test its foundational loyalty. Employee stability is highlighted as a strategic asset compared to rivals, while LG's focus on offline retail ensures partner trust and foot traffic. Can LG maintain its core values while navigating the high-stakes world of luxury sales?
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Record IPO Driven By Deep Trust
- LG India's IPO drew bids worth over 4 lakh crore rupees and listed ~50% above issue price.
- That frenzy reflects deep investor trust built by the subsidiary's long-term India strategy.
Hands-On Retailer Relationships
- Retailers in India treat LG as a partner, not just a supplier, with executives visiting shops and sharing meals.
- LG often absorbs retailer burdens like credit, unsold stock and margin support to maintain loyalty.
Generosity Reduces Free Cash Flow
- LG converts about 60% of operating profits into free cash flow, lower than Samsung or Whirlpool.
- That lower conversion reflects the cash costs of generosity toward retailers and employees.