‘We aim to make Samsung here a $10b co by 2013'

Vinay Kamath Bindu D. Menon | Updated on April 20, 2011

J.S. Shin, President and CEO,Samsung, South-West Asia, with a model launching the Samsung Galaxy 10.1 and the Ace 2 at the Samsung Forum2011, held in the Capital earlier this month. — KAMAL NARANG

J.S. Shin, President & CEO, South-West Asia, Samsung Electronics, on the development of products.

It's a big day for Samsung Electronics. Its Forum 2011 held last week in New Delhi was meant to be a showcase of the Korean electronics major's cutting-edge technology in a variety of electronic goods. Samsung also used the Forum to unveil its Galaxy S II smart phone and also gave a preview of the Galaxy tab which is to be launched soon. That apart, the cavernous hall had a bewildering variety of new gadgets on display — 60 in all were unveiled at one go — from Smart TVs to spider-like remote-controlled vacuum cleaners that crawled on the carpet, talking microwaves, washing machines with ‘wobble' technology, large screen LED TVs, laptops and lots more. Post the presentation made by several of Samsung's business heads, J. S. Shin, President & CEO, South-West Asia, Samsung Electronics, spoke to BrandLine on how all the new gadgets and technology will help Samsung gain market leadership in India. Excerpts:

Have you crunched time between when you launch a product internationally and in India?

I think so. Nowadays, our worldwide strategy is to do it at the same time. Two years ago, it was difficult for us to do it at the same time. But now, technically it's possible. The latest new products' launch time is the same. Now, it is no longer a technical issue but more a logistical issue, though now we are able to launch at the same time.

What is driving this innovation at Samsung, does it stem from consumer insight or do you launch products ahead of time so that consumers take to it slowly?

I should say both. We always keep technical leadership, we launched LED televisions last year and this year Smart TVs are already on the market. Also, we are preparing a lot of good applications for the consumer. For example, in the smart phone area, we offer a wide choice for the consumer to select from in terms of the operating systems, whether Android or our own Bada. We are very strong on the hardware side, but a little bit behind on the software side. Even though today, Bada is small, eventually we will focus on it; at the moment, Android is our main focus area. We will build this one too (Bada).

How are you going to communicate all this technology to your consumers in India? Do you have an aggressive communication campaign on the cards?

This is a big investment for us. 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. In every product category, we are launching new products by the second quarter of this year, whether it is the Galaxy S II or the Tab. The Smart TV is already on the market. From the second quarter we will put much more investment in our communication package.

About 4 per cent of your India sales go into your spends on marketing and advertising; will that go up?

We will spend cautiously. We will be a $5-billion business this year, so 4 per cent of that will still be a big number. We have many products so I have to allocate (budgets) properly.

Today, you unveiled almost 60 new products in different categories. All these new products will help you become a $5-billion company?

Oh, yes. Of course, incremental sales will be there, but it's a combined activity, it will help but I can't say what will help us hit our target. We are targeting a 40 per cent growth in sales this year over last year. 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.

How much will Samsung India contribute to Samsung global sales?

Last year, 2.5 per cent, but again, Samsung India will be a $10-billion company by 2013 but, our contribution will be 5 per cent by then. Last year, Samsung's overall revenues were $135.8-billion. By 2013, it will be a $200-billion company; out of that 5 per cent will be $10 billion. That is my ambitious target, but again, there are challenges.

There is a lot of resurgence among the Japanese brands in India; does that bother you, as Indians have always been favourable to Japanese brands?

At the moment, our competitors have strong products but they need more investment and more time to adjust to local requirements, but again, eventually, they are competitors like everyone. Many Chinese and Japanese brands are here, given the growing importance of the Indian market.

Chinese brands too are beginning to invest a lot in the Indian market; do they pose a threat to you?

They are not much of a concern now, in durables they are okay. But, 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.

You are launching so many products in the market, does that lead to shorter inventory cycles for you? How do you manage it?

That is our strength. We are very strong in SCM. In the electronics industry, our technology and knowhow is the best. Even with short product cycles, we can manage. There is a clear difference between Samsung and competitors.

How long do your products stay on the shelves?

It's different for durables, appliances and mobile phones. Mobile phones would be six-eight months, while for appliances and smart TVs it would be a year. Depends on the products. Of course, mobile phone is shorter than the others. People are upgrading faster.

Published on April 20, 2011

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