It's a chink in its armour, which it is desperately looking to plug. The country's largest consumer durables company LG Electronics is looking to relaunch its mobile phone business - a segment where it lags behind archrival Samsung Electronics by miles.
Persons in the know say that LG is expected to launch some high-end models once 4G picks in India. Currently telecom operators such as Airtel have launched 4G in cities such as Kolkata and Bangalore. But the technology is expected to pick up following the entry of more players next year.
Till that time LG proposes to have a "miniscule" presence in the segment. It has already brought down its presence in the feature phone (that is, the regular handsets) market, with its emphasis largely on the smartphone market, where it has the brand Optimus.
But owing to the lack of demand for LG's smartphones, key retailers such as Future Group, Tata Group's Croma, Vivek's and regional chains such Snehanjali do not stock the product at all. Says Rajan Malhotra, president, retail strategy, Future Group, who heads its electronics chain eZone, "We have shortlisted some brands in mobile phones based on customer preference. Though we deal with LG in the home segment in a big way, we do not sell their mobile phones."
While Ajit Joshi, managing director & chief executive officer, Infinity Retail, which runs the Croma chain of stores was not immediately available for his comments, an executive with the group confirmed that it was not selling LG phones.
K Mulchandani, director, Snehanjali, a Mumbai-based consumer durables and electronics chain, also said he was not selling LG's mobile phones at his stores.
A mail to LG seeking comments on the relaunch and way forward for its mobile phone business elicited no response till the time of going to press. But executives within the company say that LG's strategy is to focus on mobile retailers rather than consumer durable and information technology (CDIT) retailers. They argue that for the latter the consumer durables business is core not mobiles, hence the emphasis on the former, where they are present across the board.
An executive from retail chain The Mobile Store confirmed that it was selling LG's handsets. But he does admit that the sales traction is nothing compared to a Samsung or Nokia or even Micromax.
According to the Voice & Data 100 Survey for 2012, the top five mobile handset vendors in India by volume include Nokia, Samsung, Micromax, Blackberry and Karbonn. In the smartphone category, Samsung comes first followed by Nokia, Micromax, Blackberry and Karbonn.
While Samsung has made giants leaps in mobile phones since expanding its portfolio in India in 2008, the decisive year for it was 2010 when it forayed into the smartphone market in the country with its Galaxy series. There has been no looking back since then.
Today, Samsung reaches over a 100,000 outlets in India with its mobile phones and continues to expand reach. In contrast, LG has struggled with its handset business both in terms of reach as well as models.
An expert on the mobile phone industry says, ""For a global player they need to have humongous R&D (research and development) capabilities in development of handsets, operating systems..You need to work on interfaces then brand building, advertising and so on. LG has not been able to do it all."
Globally, LG ranks fifth after Samsung, Nokia, Apple and ZTE in handsets with a share of 3.5%. In India, it has a two% share of the handset market.
Consumer durable retailers say that given its small share, it was simply becoming unviable to stock LG's phones. "It is not viable for us to stock LG phones when the share is so small," says the head of a consumer electronics chain in the south. "Samsung has virtually captured the market and demand for its products remains high," he adds.
