Innovating to lead

Virus Doctor and Eco Bubble are not weird characters from a kid's comic book. They are innovative technologies being developed by Samsung India for its air-conditioners and washing machines to retain consumer interest in its products. As slim margins squeeze many durable and appliance makers and keeps investments in innovation low, Samsung says it is making innovation its mainstay.

Urban consumers are increasingly looking beyond the mere utilitarian value of gadgets and are seeking attributes such as aesthetics and technology. Samsung is readying a war-chest to stay ahead of the race.

For J. S. Shin, President & CEO, Samsung South-West Asia, the consumer's aspirations to own new products on a higher technological platform is an important driver of innovation.

“Innovation is a key area we are focusing on. Samsung Electronics spends over 8 per cent of its global sales on research and development every year and the Indian investment is part of the same,” says Shin. (Most international durable makers have a similar kind of spend on R&D.)

Innovative new launches will drive sales for the current year. “We are looking at achieving a 40 per cent growth in sales, that stood at $3.5 billion in 2010, and have planned a slew of launches in the consumer electronics, mobile and IT business segments in the current year,” he said.

At Samsung's two R&D centres — in Noida and Bangalore — technicians, engineers and product designers are working to develop products that will create a ‘wow' feeling among consumers.

Broadly, the overall strategy for the year will revolve around creating new markets, product customisation and enhancing channel penetration.

So what product categories will drive growth?

Clearly, flat panel televisions will be a key thrust area for all manufacturers.

“We plan to lead the ‘Smart TV' platform in India with 3D TV, LED TV and LCD launches over the next couple of months. Also, the smartphone segment, with the Wave and Galaxy series, will be a huge sales channel. We are looking at notching up a 40 per cent market share in the smartphone segment in the current year (January-December period),” explains Shin .

Samsung says it plans to bring to India mobile devices such as the Nexus S and the Galaxy SII, unveiled at the Mobile World Congress at Barcelona.

Retail as a key focus area

Most retailers have announced strong capex plans for 2011. Rating agency Fitch estimates annual GDP growth of over 8.5 per cent for India over 2010-2012. “This has translated into robust consumer expenditure, and, consequently, strong same-store sales growth for most large retailers,” Fitch notes.

As retail occupies a bigger pie in the consumers' mind, most companies are looking to tap the market. Samsung has also created a new retail team under its mobile business vertical, which will be headed by Atul Jain.

“This retail team, which will have around 140 members on a pan-India basis, will be responsible for enhancing consumers' experience with Samsung mobiles at select, large, multi-brand outlets and modern trade outlets. The focus of the team will be to manage trained Samsung product consultants at these outlets, manage product availability at these premium stores and even set up exclusive stores for Samsung mobile and IT. The retail team is distinct from the sales team that is managing the company's overall sales channel,” Shin elaborates.

Also, Samsung has appointed Elkana Ezekiel as its new CMO. It has also strengthened its audio-video and home appliance businesses by creating a new position at the level of vice-president in these segments; Raj Kumar Rishi has been appointed to the former post and Mahesh Krishnan to the latter.

COMMENT NOW