The slowdown has been cruel to most consumer durable brands. LG hasn’t been spared either. Flat sales in the past three years is proof. After touching the Rs.16,000 crore-mark in toplines in 2010, the company has hardly grown. Its revenues stood at Rs.16,200 crore each in 2011 and 2012. But for now, disappointments seem to end there. Aggressive marketing efforts since 2012 have ensured that LG India grows by more than 10% y-o-y during the first six months of 2013. LG has not only managed to reposition itself as a premium brand (priced at par with the likes of the Samsungs and the Sonys), but has also made right the wrongs it had done in the flat panel TV and smartphone businesses. As such, market reports suggest that the company is on its way to recording a 20% y-o-y revenue growth to touch 19,000 crore this year if all goes well during the oncoming festival season. Even in terms of market share, the Korean giant seems to be making 2013 count. During H1, 2013, as per GfK-Nielsen, its overall market share in the consumer durable category grew to 30% (from 27.8% in 2010). For now, LG is focussed on putting together all its energies on developing quality products – the most critical ‘P’ for LG, as Sanjay Chitkara, Head – Corporate Marketing, LG India, claims. Excerpts from an interview with Chitkara:
How is LG faring in the Indian consumer durables market – home electronics, appliances and AC business – that is worth Rs.50,000 crore today. And how do you see the Indian market evolving in comparison to other markets globally?
In the midst of a sluggish scenario – rather, a period of revival for the global and Indian economy – this year, LG could grow in double digits, at about 15% y-o-y in the home appliances market. Constant innovation, eco-friendly products, new launches and benefits to the consumer were the driving factors for our business. For instance, our ever cool and direct cooling refrigerators, which can maintain the cooling conditions even without power for 7 and 9 hours respectively and come with an added advantage of 20% power saving, were a couple of such products. These products were developed after extensive research was conducted on the Indian market. I have just mentioned the home appliances market so far, and it is obvious that my tone is positive. The same is true with the consumer durables market.
Three months back, LG introduced a host of new products in the TV segment – including the world’s slimmest TV. What effect will these new TV launches have on the company’s topline? You must be referring to the products showcased at the Tech Show 2013.
Yes, where 70 new products were showcased, along with the 2013 line-up for India.
We’ve introduced the world’s first Ultra HD TV and OLED TV. To cater to music lovers, LG has introduced the Jazz TV with 1200W PMPO with 2.2 channel and transform TV. With the launch of these flat panel TVs, LG has grown 20% this year and we are targetting to capture a 30% market share in the TV segment by the end-2013. Obviously, these new products across various categories are important to build relevance for the brand in today’s times. These help us market LG as a younger and more premium brand to the world.
You sound so bullish, as if the slowdown and revival has had no impact on LG. Or is that true?
Because the slowdown involves macro-economic aspects, at present the sentiments are low. But we at LG are optimistic that revival will happen sooner than expected. Despite the revival-post-downturn, fact is, we could grow a lot during the last six months.
Any new campaign you are currently developing?
We started the year with the Inverter V AC, which is an inverter compressor AC. Thereafter, we had the Power Cut EverCooL refrigerator. And at present, we have the Ultra-HD 84-inch TV promotions on air. Besides these campaigns, we are about to launch our new campaign for the new Optimus G Pro smartphone. During the festive season, LG has plans to launch a host of campaigns pan-India.
About seven years back, LG seemed serious about the smartphone market. Then the energy died out in that segment. Today, we see a revival of interest at LG in this product category. Can you throw some light on the company’s plans in smartphones?
Yes, the energy is high and we are very serious about making it bigger than ever in the smartphone market. Our smartphone business has registered a growth of 200% y-o-y in the first six months of 2013. Talking about products, we started the year with the Optimus G. Then followed the Nexus and the G Pro. By the end of 2014, we are hopeful of capturing a 10% market share in the Indian smartphone segment. It’s a steep climb but appears very much a possibility.
What role does digital or social media marketing play for LG?
Because today’s youth don’t stay much in touch with traditional mediums and consume a lot of digital content, we have a focused approach towards digital and social media marketing. We have doubled our digital media marketing budget for 2013 (as compared to 2012), and are very active on social platforms. LG has its own Facebook and Twitter pages. For example, during the recently concluded Champions Trophy, we had a campaign called ‘LG My Cricket My Voice’. Through the campaign, we engaged international cricketers like Pollard and Bravo on our Twitter page. It was a fun activity centered around a contest for consumers to engage in conversations with Pollard and Bravo. The youth is a critical TG for us and hence we have developed a couple of products keeping this group in mind. We have introduced the pocket printer that comes in both wired and wireless formats. Songstar is another such product – it’s a karaoke device that again comes in both wired and wireless variants. It has over 4000 songs in 9 languages, including English, Hindi and regional. LG has also introduced the X-boom, which enables a user to create his/her own music and is specifically focussed at party lovers. It has the highest volume capacity in India – 25,000 PMPO.
And how about LG’s association with cricket? How has that worked to increase the brand’s appeal amongst masses in India?
LG’s association with ICC has worked as a huge platform and has helped our recall grow manifold amongst the Indian mass and youth. It has positioned us as a very vibrant brand.
So what’s the most important ‘P’ for LG?
Product is the most crucial ‘P’. Our focus is always to deliver quality products. A marketing campaign can prove worthy only if the product is worthy.
So what is your growth target as far as enhancing physical presence in India is concerned?
At present, we have 590 big format brand stores and 1100 small format brand stores pan-India. LG wants to make it a total of 2000 by the year end. That would mean an addition of 300+ stores – big and small.
