LG's exit from handsets biz will have little impact on Indian market

The brand's presence in India was already miniscule, exit was inevitable

After years of dwindling handset sales, Korean electronics and appliances giant LG Electronics finally pulled the plug on its handsets business on Monday. While the move may have caused heartache for a small bunch of LG enthusiasts, it will have little impact for the company's operations in India and the market itself.

Once a prominent player in both - the smartphone and feature phones markets – LG's presence had come down to near zero. While the brand continued to sell a few models through online platforms like Flipkart, its visibility in the retail network was confined to a few branded stores.

According to Prabhu Ram, head of industry intelligence group at CyberMedia Research, LG's share in the local handsets market was less than 0.5 per cent by end-2020. “While LG has a strong brand equity as a consumer electronics brand, its mobile division has not been able to cope with the hyper-competitive mobile market dynamics globally and in India”, he said.

While LG is one of the oldest mobile handsets brands in the world, of late its fortunes had been dwindling. From the peak of 2013, when it captured the fifth spot in the global handsets market, its share in the global dropped to two percent by 2020, data from IDC show.

Despite several innovations, in India it could never break in the top league. “In India they were never a big player although they brought several interesting form factors much ahead of time and anyone else like 3D screen phone, wide angle, curved screen phone etc”, said Navkendar Singh, research director at IDC.

But LG fell short on several fronts. From marketing prowess to investment in distribution and channel development, its efforts failed to match the industry rivals like Samsung and Nokia even during early days. And with the entry of Chinese brands with their aggressive expansion strategies, LG was further cornered in the local smartphone market, said Singh.

“LG’s innovation prowess, including its attempts to redefine the mobile form factor, were laudable. Yet, they failed to make strong market gains, owing to lack of effective messaging and go-to-market strategies”, said Ram from CMR.

Further, with its handsets business down for several years now, analysts predict negligible impact on the company's topline here.