[Editorial] Sales decline

About 4 in every 10 units of the nation’s top 10 conglomerates saw their sales fall during the first half of the year.

Data from the Korea Exchange showed that 26 of 68 listed firms, or 38.2 percent, of the 10 business groups suffered a drop in sales on-year.

On a consolidated basis, five of the 10 groups reported decreases in revenue. SK topped the list with 6.8 trillion won ($6.1 billion), followed by POSCO with 6.6 trillion won, Hyundai Heavy Industries with 4.1 trillion won, LG with 1.4 trillion won and Hanjin with 812 billion won.

Furthermore, the 68 units saw the rate of collective sales growth come in at 0.28 percent, compared to the same period in 2015. This falls short of the average of 0.64 percent growth posted by all main bourse-listed firms and the average of 4.33 percent by secondary Kosdaq-registered firms.

The situation is attributable to a severe slump in exports -- a main growth engine for Korea’s big companies -- in the wake of the slowdown in China and major export destinations over the past year.

Samsung Electronics offset the sales plunge of the leading companies with its better-than-expected performance at home and abroad. While Samsung Electronics is also leading the stock rally, the bull market led by the No. 1 company in market capitalization does not appear to be stable, as other blue chips, including Hyundai Motor, have been in a bearish mode.

Samsung renewed a record-high in stock prices Thursday on the back of the continuous net purchase of foreigners over the past few months.

The widening gap between Samsung and other major equities suggests that the conglomerate sector needs to stop delivering excuses such as the won’s appreciation against major currencies and the protracted slowdown in the global economy.

Conglomerates should thoroughly review what caused their decline in sales and shrinking market shares overseas, instead of grumbling over weak export price competitiveness due to currency exchange.

Though it cannot be denied that many local consumers are discontent with Samsung’s dominant position or some past irregular practices, the group’s painstaking efforts to win uphill technology battles with competitors in the global stage should be acknowledged.

It has already beaten Japanese competitors in consumer electronics and is steadily attracting consumers worldwide, amid keen competition with Apple and Chinese firms. Its semiconductor unit is matchless.

A more significant point is that Samsung Group has been most active among the 10 conglomerates in disposing of unprofitable units or combining similar subsidiaries.

Hyundai Heavy, Hanjin and some other companies are undergoing difficulties from an international glut in the shipbuilding and shipping businesses. Many other sectors also face tough challenges posed by China’s state capital-backed enterprises.

If there is no drastic investment in future technologies and intragroup restructuring via full-fledged streamlining, some of the current 10 business groups may become defunct in the coming decades.