LG Electronics: Innovation is key

Korean consumer durables major, LG Electronics, is doing everything it can to retain its number one position in the Indian consumer durables market, estimated at Rs 35,000 crore. With more than 30 per cent share of this market, it now expects its India operations to overtake its Korea sales in the next three to four years.

It has just launched a new range of refrigerators with what it calls the “wonder door” (door-in-door). First launched in Korea, the (door-in-door) refrigerator will be the country’s tallest (782 litres), priced at Rs 176,500. Alongside, LG India has extended its portfolio to a new category — that of water purifiers in the price range of Rs 34,490 and Rs 39,990.

Soon Kwon, president (South-West Asia region) and managing director, LG Electronics India, says, “We want to strengthen our number one position with more innovations in our products. We would stress on developing products for the Indian consumer — there is an India insight product department that works to this end. Our water purifier, for instance, has auto-flush technology that works by pressing one button, and it cleans all the connecting pipes in the purification system.”

Adds Rajeev Jain, business head (home appliances), LG Electronics India, “What differentiates our product from the others is the fact that the water inside remains bacteria-free for 48 hours, and it’s got a stain-less steel storage system while others have plastic.”

LG Electronics India is targeting a revenue of Rs 20,000 crore (the figure currently is Rs 16,000 crore) through rapid expansion and new product launches. It is investing Rs 800 crore to expand production capacity, and the advertising budget is Rs 700 crore for this year.

LG claims that its new door-in-door refrigerator is two-and-a-half times bigger than existing home-bar refrigerators in the same price range (between Rs 160,000 and Rs 180,000). Jain says, “We garnered 28 per cent share of the refrigerator market in 2010, and hold 45 per cent of the market in the side-by-side refrigerator segment. As the Indian consumer is welcoming innovative technology quite aggressively, we expect the door-in-door refrigerator to contribute 5 per cent to our side-by-side refrigerator range (1,000 units of the 20,000 units the company hopes to sell) this year.”

LG India has rolled out a television commercial — the tag line goes “Life’s good when you get joyous surprises” — to support the refrigerator launch. Shot in Mumbai, the TVC showcases the user-friendly interface of the home-bar refrigerator. The 30-second TVC, conceptualised by Rediffusion Y&R, the creative agency of LG Electronics India, is directed Zuher Khan.

For the water purifier, the company has chosen the below-the-line route and the tagline goes, “Life’s good when someone cares for you”. “The water solution range needs live demonstration, and so we did in-store activation in the eight cities where we have launched it,” says Rajeev Jain. “During the laboratory test, we got it installed in 13 Indian houses, post which we did some more modifications before we let it out into the market.”