Korean Conquest:

How LG and Samsung won over the

Indian Market
Presented by:
M. Arsalan Sheikh (#7989)
Ahsan Bham (#8106)
Sobia Khan (#6316)
Consumer Durables Industry:
Overview
 Fastest growing industry in India
 Advertising and brand building has a key role
 Demand is seasonal and cyclical
 Price and brand differentiation
 Technology driven
 Continuous innovation
 Supply and distribution network
 High involvement in R&D activities
 After-sales services
Consumer Durables Industry:
Product Segmentation

Consumer Durables
Consumer Appliances Consumer Electronics
White Goods Brown Goods  Mobile phones
 Refrigerators  Mixers  Televisions
 Washing machines  Grinders  MP3 players
 Air conditioners  Microwave ovens  DVD players
 Speakers and audio equipment  Iron  VCD players
 Electric fans
 Cooking range
 Chimneys
 Consumer Durables Industry:
Performance

• Expected to drive the market to a value of $7.7 billion by the end of 2013,
an increase of 60.7% since 2008. An anticipated CAGR of 10% for the five-
year period 2008-2013
• In 2013, the Indian household appliances market is forecast to have a
volume of 52.2 million units, an increase of 50.4% since 2008. The
compound annual growth rate of the market volume in the period 2008-
2013 is predicted to be 8.5%.
Consumer Durables Industry:
Current Scenario
 In term of purchasing power parity (PPP),
India ($3.55 Trillion) is the 5th largest
economy in the world and overtake Japan in
the near future become the 4th largest.
 The middle class in India is fueling economic

growth and disposable incomes are expected

to grow at an average of 8.5% per year until
2015.
 The urban market has now largely become a

product replacement market.

Consumer Durables Industry:
Current Scenario
 Indian consumer durable market is expected
to reach Rs. 40 Billion by on 2010
 The Indian household appliances market grew

by 32% in 2010.
 The top 67 cities in India are the key potential

markets for appliances. These cities

contribute 14% of the GDP.
 The market share of MNCs in the consumer

durables sector is 65%.

Consumer Durables Industry:
Rural Market
 The rural market is growing faster than the urban market.
 Rural sector offers huge scope for consumer durables industry, as it
accounts for 70% of the Indian population.
 The urban market and the rural market are growing at the
annual rates of 7%-10%and 25% respectively.
 Rural areas have the penetration level of only 2% and 0.5%
for refrigerators and washing machines respectively.
 In case of television the penetration level is 18%.
Consumer Durables Industry:
Current Scenario
Consumer Durables Industry:
Brands
MNCs National Regional
 Korea Onida Bush
o LG Videocon Crown
o Samsung BPL Salora
o Hyundai Kelvinator Weston
 China Allwyn Beltak
o TCL Godrej Oskar
o Haier Voltas
 Holland IFB
o Phillips
 Japan
o Sony
o Panasonic
o Sharp
o Hitachi
o Sansui
o Akai
o Aiwa
o Whirlpool
o Electrolux
Consumer Durables Industry:
White Goods

1995-1996 2005-2006 2009-2010

Demand 3.43 million 8.72 million 13.14 million
149 per 1,000 319 per 1,000 451 per 1,000
Penetration level
households households households
Consumer Durables Industry:
Market Segmentation

 Demographic  Psychographic

◦ Income ◦ Life style

◦ Occupation ◦ Personality

 Geographic  Behavioral

◦ Tier 1 Cities ◦ Value

◦ Tier 2 Cities ◦ Benefit sought

Demand & Growth Driver
 Personal Income
 Availability of financing
 Product affordability
 Increasing share of organized retail
 Entry of heavyweight retail players
 Increasing appreciation of the Rupee
 Technological and design advancements
 Innovative advertising and brand promotion
Consumer Durables Industry:
White goods
Consumer Durables Industry:
Competitive Structure
Company Profile
 Situation
 LG Electronics India Pvt. Ltd., a
wholly owned subsidiary of LG
Electronics, South Korea was
established in January 1997
after clearance from the
Foreign Investment Promotion
Board.
 Growth Strategy
 Focused on innovative,
feature-rich products –”Value-
◦LG has differentiated its products
using technology and health
benefits.
 Local and efficient manufacturing
to reduce cost
◦Implementing a “digital
manufacturing system” (DMS) as a
cost-cutting innovation.
 Product localization
◦LG came out with Hindi and
regional language menus on its
appliances
 Regional channel strategy and wide
distribution network
Company Profile:
 Objectives
◦ The aim of LG is to provide the customers with utmost
satisfaction through leadership.
◦ The fundamental policy of development is to secure
product leadership that the Customers may have the
utmost satisfaction.
 Core Competency

◦ Product leadership, Market leadership, People leadership

Company Profile:
SWOT Analysis

 Strength ◦ Good after-sales

◦ Market leader in home services
appliance segment  Weakness
◦ Manufacturing unit in
◦ Consumer compare LG
tax-incentive areas
◦ Wide range of product products with its
categories to tap the competitor Samsung
consumer upper-middle
and Sony, not with
class and upper-upper
other foreign brand
class
◦ LG, having the widest ◦ Similar product
Company Profile:
SWOT Analysis

 Opportunity  Threat
◦ Shifting to rural market ◦ The closest competitors
◦ Control over the white Samsung is also from
goods market, as we South Korea, and
know the highest consumer compare LG
market in home products with Samsung
appliance market products
◦ Home appliances market ◦ Price-against-benefits
is growing very fast, so war with its closes
there is an opportunity competitors, Samsung &
for LG to launch new Sony
Company Profile
Situation ◦Branded its products as superior
technology and environment
Samsung India Electronics Ltd. friendly ones.
Launching the best in design and
is a subsidiary of Samsung
technology
Electronics Corporation (SEC)
◦Samsung has won over 150
headquartered in Seoul, Korea. awards in India for its technology
Samsung India was formed in and design based products.
Customized products for its
1995.
consumers
Growth Strategy ◦understands the local cultural
sensibilities to customize its
Building an affluent customer products according to the market.
Manufacturing plant and localization
base –higher priced products
Company Profile
Objectives

◦Samsung aims to become India’s leading volume

retailer in the consumer electronics segment

◦Achieving its aim by focusing on its Core Strategy

◦ Work on strengthening its unique Brand Image

◦Gaining Customer Satisfaction

Core competency
◦Technology leadership
Company Profile:
SWOT Analysis

 Strength  Weakness
◦ Core value: Approach
◦ Approach market
market through
technology and design through technology and

leadership design leadership: a

◦ Launching hi-tech and slow process.
contemporary products
with zeal and speed ◦ Not targeting the mass
◦ Created a Unique Brand market
Image for itself as a
high end value driven ◦ Not spreading the brand
Company Profile:
SWOT Analysis

 Opportunities  Threats

◦ The Indian Mass Market. ◦ Indian Mass Market may

be captured by a rival
◦ The high end value company, LG, Onida,
Videocon;etc.
driven proposition helps

increase the Market ◦ Increased emergence of

modern retail chains- a
Share.
problem as Samsung is
investing in building a
◦ Samsung is well known
retail network across
for it product
the country
Competitor Analysis

 Localized positioning  Positioning on a

global basis
 Focus on local R&D  Centralized R&D
 Range of products in  Lesser Range of
a wide range products
 Dealer network is  Dealer Network not
very strong as strong
 Many products  Less Indian