They focused on selling their premium products for some time, but India’s two largest consumer electronics companies LG Electronics India Pvt. Ltd and Samsung India Electronics Pvt. Ltd are now increasing their emphasis on products targeted at the mass market because this is the largest segment of the overall market. While Samsung is trying to do this by leveraging some of the technological innovations and features it used in its premium offerings, LG is strengthening its service network.
“(Sales of) premium-end products are growing very fast, but the base is very small and volumes are hence not large enough for consumer electronic companies to depend solely on this category,” said Suresh Khanna, secretary general, Consumer Electronics and Appliances Manufacturers Association (Ceama), an industry body. “The majority of sales come from the mass category. Hence, they need to revive demand in this segment,” he added.
According to estimates provided by Ceama, for most companies high-end television sets, including LCD TV sets and plasma display panels, account only for 1-2% of sales in terms of volume, and 4% in terms of value.
In Samsung’s case, the company is, for the first time, using its “Silver Nano” technology in semi-automatic washing machines that are being introduced in the market ahead of the festival season. The company claims that this technology helps remove bacteria from clothes and that it was hitherto available only in high-end full automatic washing machines. Samsung has also introduced its Easy View technology on conventional flat-screen TV sets (this technology includes such things as an on-screen channel menu); it claims this technology enhances viewing experience. It has also launched direct-cool refrigerators with built-in voltage stabilizers (previously, only frost-free models were available with these).
“We are now in a position to focus on the mass segment as well in terms of our product innovation,” said R. Zutshi, deputy-managing director, Samsung India. “Our new focus is complemented by our research and development operations in India, which has put us in a position to customize and even develop technologically advanced products for the Indian market,” he added.
Meanwhile, Samsung’s rival LG Electronics is betting that “service” is an important issue for mass market customers and is setting up call centres and Web-enabled services to reach out to them.
“LG believes that the mass market is an important area that cannot be ignored. We think it important to have an effective communication with them,” said a company spokesperson said. LG also plans to improve its focus on regional markets. “There is a need to differentiate the brand according to regional disparities. We make this differentiation not only in terms of product but also with packaging, communication and association with the brand,” the spokesperson added.
Khanna said now that these companies have consolidated their presence in the premium segment, it was only natural for them to focus on the mass market. “High-end products help companies build their image and equity in the market but the turnover and market share is still largely determined by the mass category,” said Khanna.