Korean products gain more popularity in the local refrigerator market

Korean products gain more popularity in the local refrigerator 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.