Nearly a decade after they entered India, Samsung and LG continue to dominate the white goods market.
Nearly a decade after they entered India, Samsung and LG continue to dominate the white goods market.
NEW DELHI: It has been one hell of a decade for the two Korean chaebols — LG and Samsung. Together, they taught domestic competitors on how to do and not do business in India.
In no mood to vacate their top perch, the players are tweaking their acts to retain their suzerainty in the fiercely competitive white goods arena.
The Rs 2,500-crore Samsung took its first baby step in 1996. Since then, it has climbed to the second place, trailing compatriot LG in most consumer durable categories.
The Rs 9,000-crore LG Electronics, which began its Indian sojourn a year later, continues to dominate white goods industry.
Having established themselves, they are now rejigging their strategies to retain their competitive edge.
For example, LG has had a change of heart. After penetrating the rural hinterland with basic products for price-sensitive consumers, it wants to switch on to the fast track.
It will now deploy its marketing and investment muscle behind fast growing premium products. Says Girish V Rao, vice-president, sales & marketing, LG, “We will have to focus on the premium-end to maintain our leadership in each product category.”
According to him, while the volumes and revenue flow are maintained by consolidation in the mass market, the premium products will enhance profitability.
Sounds familiar? That’s because, it has been compatriot Samsung’s strategy all along. Realising its inability to confront LG in each segment, Samsung opened the battle front on one of its strongholds - premium products with cutting-edge technology. And even as LG continued to march ahead, Samsung stuck to its guns with a product portfolio without compromising on pricing or features.
Result? Samsung dominates several segments like LCD and plasma panel televisions, is a close second in flat TVs, and is snapping at LG in the air-conditioner contest.
LG’s new high-end range will include flat TVs (LCD and plasma), GSM mobiles, IT products, frost-free refrigerators and front-loading washing machines.
“We have to maintain our grip on the growing market. It is up to us to expand it,” says Rao.
It is already making GSM mobile handsets and high-end frost free fridges at its Ranjangaon facility in Maharashtra. Rao says that if the market size justifies the investment, then LG has no qualms about making even the PDP/LCD TV sets and the front-loading washing machines in India.
Samsung is the star in the LCD market with over 45% marketshare, and wants to breast the tap in the entire flat TV segment. It is also dominates the side-to-side refrigerator segment.
Says deputy managing director Ravinder Zutshi, “A thrust on product innovation and a wide product range has made us No. 2 across most product categories. But our aim is to be No. 1 in premium categories.”
He adds that product innovation, technology leadership and design will continue to be the pillars of Samsung’s brand strategy. And it makes sense as the premium segment is growing much faster than the mass-based market. Driving growth will be a clutch of new products like MP3 players, digital still camera, digital camcorders and LCD TVs.
In fact, both the players have set ambitious targets. LG wants to double its turnover to Rs 18,000 crore by the end of the decade. Samsung projects a Rs 22,000 crore turnover, accounting for 5% of global sales.
If that happens, Samsung will finally overtake LG.
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