Samsung eyes big share of RI electronics market

Christiani S.A. Tumelap

SINGAPORE (JP): Samsung Electronics, one of South Korea's major electronics producers, is forecasting an expanding market for its merchandise in Indonesia.

General manager for marketing at Samsung Electronics in Indonesia Lee Kang Hyun said he was quite optimistic in the "near future" the company would become the market leader in Indonesia.

Lee said Samsung products, known for their quality and innovative designs and functions, were becoming more popular with Indonesian people.

He said Samsung was currently in fifth position in the local television market, third in the refrigerator market and second in the washing machine market.

In the cell phone market, Samsung had secured second position, despite sharp competition from several European products, he said.

Samsung is competing with other major electronics brands such as Sharp, Toshiba, LG, National and Polytron.

Lee acknowledged the market for electronics goods in the country was becoming increasingly competitive, but he expressed confidence that with its good market strategy, Samsung would soon become the leading market name.

"By providing products with high technology, good designs and more complete functions, we are sure we will be able to win over the market," Lee said on the sidelines of a launching ceremony for Samsung's new digital multimedia products.

Nugroho Sugiarto, marketing and sales director of Samsung Electronics Indonesia, said that with its good marketing strategy, Samsung had successfully improved its market position, especially in the washing machine and cellular phone markets.

He cited products with innovative designs, such as the newly launched washing machines with transparent covers, are popular items on the local market.

Nugroho said Samsung's new cell phone business, which only commenced this year, has also been hugely successful partly because the cell phone products have all the functions that the products offered.

Lee said that Samsung's new cell phone sales business had delivered a tremendous lift to the company's business in the country.

"Samsung's image as a qualified electronics producer is further strengthened with the launching of our cellular phone products. Our cell phone business is booming, with sales predicted to reach US$25 million this year," he said.

Samsung Electronics Indonesia is projecting Rp 300 billion in total revenue this year, about a 500 percent increase from sales of Rp 50 billion in the previous year.

Lee said sales from cell phones would contribute more than half of the total revenue.

He said the poor sales performance in 1998 was related to the country's economic crisis, and not a result of competition from other electronics companies.

Lee said that given the continued interest in Samsung products, he was upbeat total revenue would further increase to Rp 500 billion next year.

He said the aggressive marketing in Indonesia was part of its global strategy to improve Samsung markets in Asia, Europe and the United States.

Lee said most Samsung electronics goods sold in Indonesia were brought in from its Korean factories because its Indonesian factories remained focused on the production of CDRrom and video compact disks.

The establishment of the factories, which export most of their products, reflected Samsung's focus on Indonesia, he said, adding that Samsung also planned to open factories in the country to produce digital video disks and semi conductor elements.

President and chief executive officer of Samsung Asia Oh Dong Jin acknowledged that Indonesia was very important for Samsung, both as a base for production activities and a potential market for consumer electronics and telecommunication products.

"We have a heavy investment in Indonesia. There is a huge potential market, (although) it currently contributes very little -- below five percent -- to Samsung overall revenue," he told The Jakarta Post on the sidelines of the product-launching event.

Samsung plans to launch on Asia-Pacific markets next year at least 20 digital multimedia products. They will include a high- technology digital flat screen television, a sophisticated digital still camera, digital photo albums and a portable audio player that utilizes a computer-based audio compression format.

All new multimedia products will feature a 32MB memory capacity digital SmartMedia card to enable flexible and fast wireless connectivity in the transfer and sharing of pictures, voice and data between different media, such as the Internet and personal recordings.

Oh acknowledged that Indonesia would not be a particularly strong market for many of Samsung's new multimedia products due to the lack of infrastructure to support the high-technology products and the limited demand for multimedia products.

"Our market is a little bit low there, but we don't mind. The era of digital multimedia may be still too far away for many people, but we think that it can come sooner and we want to be the leading pioneer for that," he said.

Oh said Samsung was upbeat that it would become one of the world's top three digital multimedia product suppliers in the near future because it had a strong digital technology expertise.

He said that in order to support its digital offerings, Samsung anticipated a research and development investment of more than $11.8 billion in the next five years.

He said Samsung invested in 1999 $1.23 billion in digital product research and development, and would invest $1.73 billion in 2000.

He said Samsung had also allocated $100 million budget for Asian advertising campaigns to promote the company's new digital brand throughout the year 2001.

In regard to the Indonesian market, Lee said Samsung had spent this year about $1.5 million on campaigns for its cellular phone products alone.