Samsung eyes big share of RI electronics market

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.