Samsung seeks Indian growth

22 April 2011

NEW DELHI: Samsung, the electronics giant, is hoping to double its Indian revenues in the next two years, and will prioritise innovation and marketing to achieve this goal.

The company's focus on R&D means it has around 60 products that have either recently been unveiled in the country or will be rolled out in the near future.

Among Samsung's high-profile offerings are Smart TVs boasting web connections, the Galaxy Tab, and smartphones powered either by Google's Android or its own in-house alternative, Bada.

"We are targeting a 40% growth in sales this year over last year," JS Shin, Samsung Electronics' president/ceo, South-West Asia, told the Hindu Business Line.

"Considering the market and our competitors' activities, we have the highest growth number, I believe. That high growth is thanks to these new product launches."

The timescale for refreshing products partly results from the dynamics of the categories where Samsung has a presence, but also rests on evolving popular habits.

"Mobile phones would be six-to-eight months, while for appliances and smart TVs, it would be a year," said Shin. "Of course, [the] mobile phone is shorter than the others. People are upgrading faster."

More broadly, the organisation expects Indian sales to hit $5bn in 2011, and has outlined ambitious expansion plans.

"Samsung India will be a $10bn company by 2013," said Shin, as the share of annual sales attributable to the Asian nation rises from 2.5% to 5%.

Marketing should play a vital role in supporting such a process, both by promoting planned introductions and fuelling sustainable growth.

"In every product category, we are launching new products by the second quarter of this year," said Shin.

"To let consumers know about our technology we have to make a big investment in the communication to consumers and improve our distribution network through partners and our own network."

At present, Samsung allocates around 4% of its Indian turnover to marketing, and it is adopting a careful approach, not least to ensure its entire slate of goods receive adequate financial backing.

"We will spend cautiously. We will be a $5bn business this year, so 4% per cent of that will still be a big number," said Shin. "We have many products so I have to allocate properly."

Hardening competition from Japanese and, increasingly, Chinese operators is also placing different pressures on Samsung, particularly in the telecoms arena.

"Many Chinese and Japanese brands are here, given the growing importance of the Indian market," said Shin.

"In the mobile area there are a lot of cheap Chinese brands that have already taken market share, so our company could be suffering because of that, but again, we are launching high-end smart phones. We can gain market share in the premium end."

Data sourced from Hindu Business Line; additional content by Warc staff