The Korean chaebol is making its presence felt in technology-led segments such as flat-panel television sets, while LG retains its domination in white goods and appliances.
There’s an old saying: If you can’t take the bull by the horns, work your way round it. Korean chaebol Samsung has taken this lesson to heart in its drive to emerge the key player in consumer electronics, mobility and IT space in India.
While its rival LG retains a stronghold in categories such as washing machines, air conditioners, refrigerators, cathode ray tube (CRT) TVs and microwaves with an average market share of about 29 per cent each in these segments, Samsung has opted to work its way round this by latching on to segments that are technology-led such as flat-panel television sets, smart phones, tablet PCs and notebooks.
In flat panels, for instance, Samsung is the leader with a share of over 31 per cent. In mobile phones as a whole, Samsung has a share of close to 25 per cent. Within this, smart phones enjoy a share of about 18-19 per cent, while in notebooks and tablet PCs, Samsung is making steady progress having entered these segments recently. “We stepped into notebooks in 2009 in eight cities,” says Ranjit Yadav, country head, mobile & IT, Samsung. “Last year we went national and have a five per cent share in the segment,” he says.
In tablet PCs, Samsung launched its seven-inch Galaxy Tab in November last year. The firm is now poised to launch two more tablets - a 10.1-inch and an 8.9-inch - next month.
Clearly these categories will be key to its growth, say market experts. A point that both Yadav and his counterpart Ravinder Zutshi, who manages Samsung’s consumer electronics business in India endorse.
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“Yes, these are our growth drivers for us,” says Zutshi, who is deputy managing director at Samsung India. Like Yadav, Zutshi is keeping a close watch on emerging trends in consumer electronics. What is helping him and Yadav is Samsung’s focus on research & development.
Whether flat panels or mobile phones, tablet PCs or notebooks, all are at the cutting-edge of technology, say market experts, demanding heavy spends on R&D. Samsung spends close to $5-6 billion globally every year on R&D, a strength it clearly has.
In India, its R&D facilities are located at two places - Bangalore and Noida - where over 5,000 engineers work on both global and India-specific projects. Whilst being a global R&D hub, India is also increasingly seeing Samsung leverage its R&D prowess for consumers here. This is visible in the firm's go-to-market strategy in its key segments.
In flat panels, for instance, Samsung has been ahead of the curve, stepping into the LED segment before others did in 2009. Unwilling to give up its first mover advantage, it launched 3D TVs in India in 2010 ahead of others. And this year has seen the launch of Smart TVs - basically a television set that doubles up as a PC as well.
Smart TV, says Zutshi, also allows users to connect all android-based devices such as mobile phones and tablets to it. “Convergence is something we have been driving for a while now. The Smart TV concept is a result of this borne out of a need to make lives better,” he says.
In notebooks, for instance, Samsung is going the whole hog. Out of a portfolio of 28 models, 18 were launched in the first six months of this year. Yadav says that more products will be launched going forward. In mobile phones, the firm has over 50 models with the number constantly growing as consumer preferences change. In smart phones alone, the firm has been moving at lightning speed - doubling the number of models from seven to 15 in the span of six months. “You can expect this kind of speed from us given that the market for these products are such,” says Yadav.
The firm is also working on its distribution strategy. In IT & Mobility, for instance, Samsung is launching Smart Cafes across the country in an attempt to showcase its growing list of products in that segment under one roof. In the last two months, the firm has launched a total of 30 Smart Cafes in cities such as Mumbai, Delhi and Hyderabad. “The gameplan is to launch cafes in about 40 to 50 cities in the country,” says Yadav. “We will move fast.”
In consumer electronics, Samsung already has close to 300 brand shops. The objective is to ramp this number up aggressively, Zutshi adds.