| ELECTRONICS: LG, Samsung have put their stamp of leadership on the electronic goods market with good customer care & high-end technology.
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| Korean companies, it seems, have proved their worth. After 10 long years in the Indian market, Korean giants like Samsung and LG have managed to make their presence felt in more than one segment.
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| When the Korean companies ventured into the India market, they were greeted with a lot of scepticism. It was a time when quite a few Indian brands were creating ripples in the market.
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| Since then brands have come and gone, some acquired (read Akai, Sansui), some unable to withstand the competition.
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| The lone Indian brand that has been able to withstand the Korean charge is Videocon, which through clever mergers and acquisitions has been able to register its name in almost all the categories in which Samsung and LG operate.
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| One of the main and fastest growing category is, however, the television market. The size of the Indian television market is pegged at over Rs 1,100 crore, out of which over 40 per cent is accounted for by LG and Samsung. Videocon with all its sub-brands commands a market share of 20 per cent while Onida has a market share close to 9 per cent.
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| Categories such as refrigerators, air conditioners and washing machines have brands like Whirlpool, Fedders Lloyd vying with Korean firms.
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| The total size of the refrigerator and washing machine market is about Rs 4,800 crore, in which LG seems to be the market leader with about 30 per cent share followed by Whirlpool and Samsung. Videocon has a share of close to 15 per cent in both the categories.
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| So how have the market dynamics changed in the last 10 years? According to brand consultants and market experts, there are various factors which have made Korean firms’ India journey a success story.
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| Harish Bijoor, CEO, Harish Bijoor Consults, says: “It all comes down to understanding the pulse of the consumers, “something which these brands did with precision.”
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| Be it market research, investment in R&D, training, or retailing and distribution, these companies have done it all, and most importantly they introduced the phenomena of “product delight” which hitherto was unknown to the Indian consumer, according to Bijoor.
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| “The buying behaviour in the electronics and consumer durables market has been altered drastically,” says Jagdeep Kapoor, CEO, Samsika Consultants.
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| And where exactly have the Indian companies lacked? “It is about penetrating into the areas where your competition has not entered, and unfortunately, no Indian brand did that,” says another market analyst.
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| N Ramachandran, director, sales and marketing, LGEIL, feels that the company’s growth story could be attributed to the fact that it has given the customers more than what they wanted. “Our sole focus has been to provide the consumer what he aspires for, be it a TV, a refrigerator or a microwave oven,” he adds.
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| Ramachandran says, “At LG, we focus on high quality cutting-edge products and superior customer service.”
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| Many believe that it was the TV market which actually fuelled the growth. According to Bijoor, the lowest common entry point in the Indian market has become the TV. “The perception that if the TV works fine, the rest too would be good, still exists, especially in rural markets,” says a senior executive from a rival company.
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| Prior to the entry of Korean firms, aspects such as customer service were not considered important. But today it ranks high on brand priority. And that is not limited to the TV market, but extends to all categories.
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| Kapoor of Samsika feels that Indian brands have failed to address the right issues, something which Korean companies did. “They gave customers something which they had not seen, heard or felt.” And that includes technology as well.
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| According to Bijoor, Indians used to lap up anything which was thrown at them and probably a few Indian brands didn’t realise how the consumer patterns were changing.
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| “Just slapping your name on the cricket team or getting associated with celebrity endorsers doesn’t work,” he says. Yet the same criteria was used by Korean firms and it worked. “But that was matched with product offerings as well,” Bijoor argues.
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| Experts believe that the charge won’t stop and it would take something out of the extraordinary for Indian brands to cope with it. Will it happen? Well, all we can say is wait and watch. |
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