Electronics firms plan to stay on top with high-end products<\/p>\n
Leony Aurora, The Jakarta Post, Jakarta<\/p>\n
Korean producers have come to dominate Indonesia's electronics
\nmarket and they intend to maintain this dominance by introducing
\nnew high-end products featuring the latest technological
\nadvances.<\/p>\n
It has been 13 years since PT LG Electronics Indonesia (LGEIN)
\nand PT Samsung Electronics Indonesia (SEIN), the local
\nsubsidiaries of the Korean firms, began constructing factories in
\nTangerang, Banten and Cikarang, West Java.<\/p>\n
Yet in that relatively short time the companies have managed
\nto overtake Japanese manufacturers such as Sony, Panasonic and
\nSharp in Indonesia's electronics industry.<\/p>\n
Samsung, for example, ranked only fifth in Indonesia in sales
\nof television sets six years ago. Today, it is the leading player
\nin flat televisions, which use liquid crystal display (LCD)
\ntechnology.<\/p>\n
\"People's concept (of electronics) has changed from only
\nJapanese branding to include Korean brands as well,\" said SEIN
\ndirector Lee Kang Hyun.<\/p>\n
SEIN's domestic sales have risen steadily from US$170 million
\nin 2002, to $280 million in 2003 and $350 million last year. The
\ncompany is targeting $500 million in sales within Indonesia this
\nyear and another $1 billion in exports.<\/p>\n
LG, which exports 35 percent of the refrigerators and
\ntelevisions it produces in Tangerang, has taken over the hearts
\nof many housewives, claiming the number one spot in washing
\nmachine sales.<\/p>\n
\"On average, we see about a 30 percent increase in sales per
\nyear,\" said LGEIN president director Kee-Ju Lee. LG's sales,
\ndomestically and foreign, rose from US$275 million in 2003 to
\n$322 million last year, and are expected to rise to $420 million
\nthis year.<\/p>\n
LG's motto, \"Life is Good\", strikes a chord as the economy
\nslowly recovers from the monetary crisis -- the country enjoyed
\n5.1 percent growth last year.<\/p>\n
And the increase in the availability of consumer financing is
\nalso helping sales. For a down payment of between 10 percent and
\n20 percent, customers can happily take home the consumer product
\nthey want and worry about the installment payments later.<\/p>\n
However, the competition has gotten tougher as cheaper
\nelectronics goods from China and Taiwan have begun to arrive
\nhere.<\/p>\n
\"China is a big challenger. You cannot beat the Chinese in
\ncommodity items,\" said Lee from LGEIN. \"Our strategy is to move
\nto premium items.\"<\/p>\n
LGEIN plans to start a new production line for high-tech,
\nhigh-end plasma televisions in Tangerang in July this year.
\nAnother local LG company, LG Display Indonesia (LGDI), will start
\nproducing LCD televisions in June.<\/p>\n
The company is developing a wide range of products. Lee said
\nLG was the only manufacturer producing all kinds of television
\nsets, including conventional, flat, projection and plasma.<\/p>\n
\"That way, if the market wishes for one type to develop
\nfaster, we already have the technology,\" he said.<\/p>\n
Samsung sees the situation from a similar point of view. \"We
\nwill focus on our branding. Compared to other countries, high-end
\nproducts are not as attractive here. But it is developing,\" said
\nSEIN's Lee.<\/p>\n
With updated technology and the appetite of Indonesian
\nconsumers for top-end products, it seems that Korean electronics
\nwill indeed continue to be a major force in Indonesia.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/electronics-firms-plan-to-stay-on-top-with-high-end-products-1447893297",
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"sponsor": "Okusi Associates",
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