LG Electronics India, which is eyeing a 10% growth in the current year amid ‘tough’ market conditions, is working on developing an India-specific smartphone, Kim Ki Wan, MD, LG Electronics India told The Hindu .
“We need a compelling product in this vertical. We are now doing that. We are developing an Indian specific model… not a global platform design or model. We are developing a phone from the scratch in India,”he said.
For instance, Mr. Kim said, Indians like taking pictures, so the phone’s camera needs to be really good. “Features such as waterproof and shock-free, they cost more… but Indians don’t need that. Our existing global platform models are not meeting the India-specific consumer insight.”
To enter fan segment
The company, which plans to foray into the ceiling fan segment next month, is expecting a growth of 10% this year even when “market situation is tough”.
Mr. Kim said 2017 was full of fluctuations and challenges due to the roll out of GST, the new indirect tax regime.
“Just before it was rolled out, demand was incredibly high. Then it was good till Diwali, but the festival was unexpectedly slow as consumers were awaiting a possible reduction in GST. So, last year [the demand] was almost the same as 2016.”
‘Big’ expectations
On the current year, he said the company had ‘big’ expectations from 2018 with effects of demonetisation wearing off and GST stabilised.
“But we don’t know why consumers are still waiting for GST to go down, so sales are not as much as we expected. And there are new players coming in the market… so supply is increasing but demand is not growing.”
“This year in the first quarter [January-March] despite a tough situation, we grew 12%, so I expect we will end the year at 10-12%,” Mr. Kim said. He added that his target was to make India, which is currently among the top five markets for LG Electronics globally, the number two market for the Korean giant in the next three years.
Increase in localisation
The company is also mulling an increase in localisation post the increase in customs duty on products such as TV panels and PCBs.
Mr. Kim said that till such time, “the government should waive the duty. Businesses don’t like to lose money; we will be forced to increase the prices and that directly impacts the consumer.”
He pointed out this came at a time when global prices for commodities such as copper and aluminium were also increasing.
Asked about the growing competition changing the TV segment, Mr. Kim said, “Yes, it is. But we don’t take those very seriously. Very limited brands offer a value proposition. Some brands are just sourcing, putting their brand and selling but what about after sales services and maintenance? They don’t have infrastructure to offer that.”
The company is betting big on IoT devices and expects it to go mainstream by next year.
“We will offer any new products to better the lifestyle of consumers. This is our philosophy. So last year we entered into air and water purifiers, this year we will be launching ceiling fans in June. These fans will we internet-enabled,” he said.
He added, “step by step all LG products will be Internet-enabled…right now this is for premium category but IoT will become mainstream very quickly… maybe by next year. Customers will see specific value with IoT then demand will increase. And as volume increases, cost per unit will go down. And cost will not be that much an issue.”
