LG aims to become No. 1 electronics maker in RI next year
Reiner S., The Jakarta Post, Seoul
South Korea's giant LG Electronics will continue to push marketing and promotion efforts in Indonesia next year despite the general election period, in a bid to become the top electronics maker in this country.
"We aim to become No. 1 next year," said Moon-Ik Jang, general manager for corporate planning at PT LG Electronics Indonesia (LGEI), during a recent press tour at LG facilities here.
He claimed that LG's washing machine and monitor products already hold the largest market share in Indonesia, while TV, refrigerator, air conditioner, and DVD player products were in second position.
"We also want to see a significant jump in the sales of our handphone products," he said.
LG, which entered the Indonesian cellular phone market in 2001, is currently ranked sixth in terms of sales volume.
The company expected handset sales to increase next year with the launch of new models featuring the latest technology and design.
LG, however, acknowledged that 2004 would be a tough year in pushing promotion activities because of the general election. Sport events, for example, will be very limited during this period. The company has been active in sponsoring sport events and other social and cultural events in a bid to boost LG brand awareness in this country.
"We just really need to be more creative now," Jang said. He declined to disclose the size of the budget for next year's promotion program.
Jang said that winning the leading position in the Indonesian market was a crucial part of LG Electronics' corporate goal to become the global leader in home appliance electronics and telecommunication equipment in the next 2-3 years.
"Indonesia is a very important market for LG," he said, pointing out that the country of more than 220 million people offered a huge opportunity for electronics makers.
"The developing market is growing at an annual rate of 10 percent, while the global average rate is 3 percent," Jang said.
LGEI plans to further expand its extensive distribution networks to help meet the 2004 goal. Currently, the company has 15 branch offices and more than 578 dealers located in various parts of the country. Most of the dealers are concentrated in the heavily-populated island of Java, which contributes around 69 percent to the company's total sales.
Jang said that the toughest area would be competition in the TV market, particularly with the inflow of cheap products from China. "The TV market is the toughest with so many brands, including from China," he said, adding that new producers could easily enter the industry as it did not require heavy investment as compared to refrigerator production. "But in refrigerator we're going very fast."
He said that part of the strategy to win a greater share in the TV market here was to continue promote its high-end products to boost image and increase brand awareness.
Although the local TV market is 80 percent dominated by conventional TV, LG is also playing in the high-end market. "We called it the bi-polar strategy." LG's toughest competitor in the conventional TV market is Sharp, while in the high-end market is Sony.
Last month, LGEI opened its fourth TV production line at its Tanggerang factory in a bid to become market leader.
The new US$1 million line is dedicated to producing 12,000 projection TVs per year.
LGE is capitalizing on its technological prowess in the electronics industry to gain greater market share worldwide. With a whopping $1.5 billion allocated for research and investment in the 2003 investment plan, the company is truly committed to continue develop promising next-generation technologies and to secure global leadership in the core business.
The giant electronics maker is at the forefront of home networks, which represent the consumer electronics of the future. The company has already come out with digital refrigerator with LCD (liquid crystal display), allowing users to shop online, make video phone calls and watch TV broadcasts. Moreover, the Internet Turbo-drum washing machine can download washing instructions for different laundry loads.
LGE has completed development of Internet-accessible air conditioners and microwave ovens and continues to develop new appliances such as washing machines that have Internet access.
LGEI's production target (units)
Products 2003(E) 2004 2005
TV 1.2m 1.4m 1.6m
Refrigerator 730,000 1m 1.5m Room AC 70,000 100,000 200,000
Import target
TV 180,000 230,000 300,000 CD Rom 120,000 150,000 180,000 Mobile phone 75,000 250,000 420,000 Refrigerator 25,000 35,000 30,000 Washing machine 250,000 325,000 410,000 Room AC 75,000 120,000 125,000 _____________________________________________________ Source: LGEI