LG to launch Rs 10k-30k cell phones in India

Under the new India Managing Director (MD) Kim Ki-Wan (pictured), Seoul-headquartered consumer electronics major LG is looking at a new line of India-specific mobile phones in the next six months priced in the Rs 10,000-30,000 bracket. Ki-Wan took over from erstwhile head Soon Kwon in August.

The company is among the top three players in household appliances and electronics in the Indian domestic market, but has failed to make significant inroads in mobile phones. This is the first time that the South Korean firm is looking at a country-specific range of handsets, implying the importance it is giving to India.

"It is important that we understand consumer trends, for which we have commissioned a survey. This will help us when we launch our India-specific line," Kim said.

The former global head of marketing, who is said to be a close aide of LG's global chief executive officer & vice-chairman Bon-Joon Koo, says the Indian unit, which had overall sales of Rs 18,500 crore in 2014, will shed its reluctance to sell online and will aggressively explore all options to push its handsets there. "We are looking at this (online) model closely, and I think it makes no sense for us to stay away from it if consumers are flocking there. We have to balance the interests of our offline trade partners for which we may look at online-only models. This way we should keep both channels happy," he said.

The first few steps have been taken in this regard, with a more organised presence on Amazon. While the LG G4 smartphone has been available on Amazon since launch a few months ago, Kim says the possibility of expanding this to other e-commerce websites cannot be ruled out.

LG - during Soon Kwon's reign - was opposed to the growing clout of e-commerce players and had issued advisories warning consumers that purchasing products from online marketplaces would entail no after-sales service.

Kim is also taking inspiration from another Kim, namely K R Kim, the illustrious former India MD of LG, who was responsible for making the Korean brand a household name in India between 1997 and 2007. The new

India MD, who has been with LG for 33 years, says he regards K R Kim as his "benchmark", implying he is expected to bring the focus back on sales and marketing in mobile phones. This factor, say rivals and sectoral experts, would be the key to the firm's India strategy.

While Kim claims LG has a market share of four to five per cent in mobile phones, rivals say it is lower as the segment remained low on its priority list owing to the domination of rival Samsung. The Indian unit is also contemplating manufacturing handsets locally to bring down prices.

"We are still exploring possibilities. Local manufacturing becomes viable for us only when we have economies of scale. For that, the business will have to be scaled up. This is only possible when the business here in mobile phones grows. The aggression that you will now see in terms of our product, marketing and distribution strategy is intended to help us in this regard," he added.

WHAT LIES AHEAD

• To launch India-specific mobile phones in six months
   
• Will tap online channel aggressively
   
• Is also considering local manufacturing of cell phones
   
• Will overhaul marketing and sales of mobile phones