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| Edited By: Mansi Taneja |Source: DNA |Updated: Mar 13, 2018, 08:32 AM IST
LG Electronics has been on a spree of launching new innovative products in India with a focus on energy efficiency. A dedicated research and development team work towards customisation of products. For instance, the company will be launching a new product category - ceiling fan with Internet of Things (IoT) capabilities - which has been made especially for the Indian market. The company which already has two manufacturing plants in the country might be looking at setting up a third one in the next few years. In an interview with Mansi Taneja, LG Electronics India managing director Ki Wan Kim talks about how Indian market may overtake the US in the next five years.
We have a dedicated research and development team which is consistently working on products which are innovative. It is our constant endeavour to launch products which are innovative. Our driving principle is to ensure that the essence of our products is preserved from idea generation to the end-user experience; LG Signature is the embodiment of everything that is important to LG and we hope to convey that philosophy to customers who appreciate great products from strong brands. The Signature series brings together the company's best technology and best designs under a single name. The initial offerings in this series include a 4K HDR-enabled OLED TV, a more advanced twin-wash washing machine, a cutting-edge door-in-door refrigerator, a futuristic hybrid air purifier and others. This will include more products as the brand expands. Our flagship door-in-door refrigerator features a 29-inch touch LCD display and with InstaView feature, the door instantly turns transparent with just two knocks of the screen and allows users to look inside the refrigerator without opening the door. Consumers can also explore a host of WiFi-enabled features directly on the refrigerator, creating a streamlined and powerful food management system all housed directly on the front of the fridge door.
We continue to seek to innovate and deliver an experience that is unrivalled in the industry. Our interest is in improving user lifestyles and convenience. We will be launching a new product category -- ceiling fan and one of the models will be based on IoT. The fans are made especially for the Indian market with a focus on energy efficiency and aesthetics. It would have higher value propositions. The fans will have easily detachable parts which can be cleaned and then joined together. It will be launched soon.
Our focus has always been to introduce products based on Indian consumer insights; while buying home appliances, consumers need energy-efficient products. Keeping this in mind, we have introduced inverter technology across products – ACs, refrigerators and washing machines –which ensures energy conservation. We are also focused on developing technologies which enhance health and hygiene and have introduced inverter linear compressor technology into all our top-freezers. This technology uses LG's linear cooling system to provide cooling and steady temperature throughout the entire refrigerator. Once limited to premium models, now this is available to all users. Last week, we launched our dual inverter ACs which will save up to 50% of running cost annually.
We have a vast presence across India with over 20,000 retail touch points and our products are well accepted by consumers across India - both urban and rural areas. We have 48 branches and all regions develop marketing strategies depending on their local preferences and insights. With the government's rural electrification programme, we are getting new areas to expand. We are constantly looking at new, growing sectors. We target 100% coverage in all corners where our consumers are and there is demand. And wherever electrification is reaching, we are going. It is an ongoing task and we continue to invest in setting up our new retail points and other expansion.
We are getting good growth from metro areas, they are still growing. But highest demand is coming from tier-II cities as they are getting developmental infrastructure such as metros and other connectivity.
The top three markets are the US, Brazil and India. India has been constantly growing at a CAGR (compounded annual growth rate) of 7%. And we expect, in the next five years, India is likely to replace the US and be our top market in terms of revenues.
It impacted us temporarily but consumers were accommodating. There is substantial demand and it keeps increasing. Every year, we register a double-digit growth and even this year, we expect to grow in two digits. Also, every year we introduce new products and we expect about 10% sales to come from this segment.
Every year, we invest about $10 million to enhance our manufacturing capacities and to improve productivity. Right now, we are upgrading our existing facilities but we are flexible and might look at it (new plant) later as the demand in the market grows.
We are testing the market. It is not easy for us to communicate to the Indian consumers about the benefits of the product. It is a new product for them, they are not familiar. They say we have been living like this all this life, why to use these products. We are planning to create awareness around these products.
Both have their merits and demerits. Manufacturing-wise, India has an edge and it is better placed competitively.
