Korean products gain more popularity in fridge market

Korean products gain more popularity in fridge market

Rudijanto
Contributor
Jakarta

With an annual growth rate of 10 percent to 15 percent per
annum, the Indonesian refrigerator market is certainly promising
and manufacturers are quickly developing new technology and
designs to win the hearts of consumers.

This year's market size for refrigerators is expected to reach
1.7 million units, distributed among various manufacturers,
including Sharp, Toshiba, Sanyo, Samsung and LG.

The competition is indeed tough. Major Japanese brands, such
as Sharp and Toshiba, enjoy the upper hand, as the local
perception is that Japanese technology is superior.

But Korean brands are also popular among Indonesian consumers.
LG and Samsung have, for example, received positive market
responses as technologically these producers have reached the
same level as their Japanese counterparts.

"Japanese and Korean brands sell equally well here. There is
no difference because their respective quality and prices are
almost at the same level," said a salesgirl at Electronic City,
Kelapa Gading, East Jakarta.

Manufacturers admit that there is no significant leap in
refrigerator technology, although some have installed new
features to attract technologically aware consumers.

For instance, Toshiba is highlighting its plasma cluster
technology which can generate ozone and deplete ion. This
prevents the growth of bacteria in the fridge.

However, only Toshiba's higher-end products are equipped with
this technology. For lower-end products, especially single-door
fridges, Toshiba has invented a flat design evaporator that cools
the freezer quickly and efficiently.

"Freezers of other brands usually have protruding lines on the
surface which are needed to channel the Freon, but the surface of
our single-door freezer is flat. This flat surface provides a
maximum cooling system," Hery Sugiarto, product manager of
Topjaya Sarana Utama (TSU), Toshiba's marketing arm, said in
Jakarta early last week.

Not to be left behind by this Japanese brand, Korea-based LG
has also introduced its latest innovation, by integrating the
refrigerator and the Internet. This enables the fridge to be
linked (online) with the rest of the house, its owner and the
world beyond.

With a 15.1 inch digital LCD screen, the LG Internet Digital
Refrigerator (GR - D267DTU) boasts a video camera, speakers, LAN,
and modem. While in the kitchen, the Internet can be accessed for
various purposes, including online shopping, listening to music
and online cooking instructions.

Another technological improvement in this refrigerator, known
as "Ice Beam Door Cooling", speeds up the cooling process by
three times. In most fridges cool air comes from the back of the
freezer; in the LG, the cool air also comes from the door and the
side walls of the freezer.

Another Korea-based manufacturer Samsung is promoting its bio-
technology, that is said to be able to reduce the spread of
bacteria. This bio-technology is also expected to prevent the
loss of Vitamin C from produce stored in the vegetable bin.

Samsung is also highlighting its Bio deodorizer, that it
claims can preserve the aroma of each food stored in the
refrigerator.

In terms of cooling, the manufacturer offers a three-source
cooling system, in which cool air comes from the back, left and
right sides of the freezer.

While most of these sophisticated models are available on the
market, Indonesians generally prefer to purchase simpler models,
particularly single door ones.

"Single-door refrigerators make up 70 percent of total sales,
two-door refrigerators, 20 percent, and more luxurious models,
the remainder," said James Haley of LG Electronics Indonesia
(LGEI) Product Marketing.

Hery shares James' observation that the biggest market is for
single-door fridges. For Toshiba, the sales of single-door
refrigerators can reach over 85% of total sales.

"Consumers buy fridges that fit their needs and because most
buyers are newlyweds, they think a single-door refrigerator is
ample," Hery added.

The refrigerator market here is expected to swell to 1.9
million units next year. With this estimated growth,
manufacturers will try harder to grab a larger portion of the
market.

The market size of technologically-sophisticated products may
be small, but manufacturers are more than happy to launch such
products here, as promotional activities boost their appeal to
local customers.

Most high-class fridges are imported in CBU (Completely Built-
Up) form. For lower and middle-end products, manufacturers such
as Toshiba and LG have production plants in Indonesia.

"We have invested cumulatively US$9 million in our
refrigerator plant in Indonesia, which is the basis of production
for the Southeast Asian region," said LGEI's national sales and
marketing manager Sung Khiun.

If LG opened its plant as far back as 1992, Toshiba has been
investing in Indonesia for 15 years.

Certainly, local production has certain advantages, including
a lower-paid labor force.

However, according to Hery's market research, most customers
base their decision to buy a fridge on its design.

"Refrigerator design is important because the decision maker
is usually a woman. Females tend to prioritize the appearance of
products. Usually, after being attracted by a certain model,
women will consult their husbands over the quality of the model.
Thus, brand becomes the second factor after design," Hery said.

While this may be true, men can be more picky than women when
it comes to esthetics. Manufacturers have put more and more
emphasis on design as it seems both sexes are no longer happy
with dowdy looking whitegoods.
Indeed, many fridges are not white at all. Color has been
introduced along with modern kitchen design, and interiors are
more luxurious.

Manufactures may boast of their technological superiority, but
in today's society looking good is what really counts. The days
have truly passed when the fridge was an eyesore; disguised under
a handful of magnets and the grocery list.