The company has formed a special team, which will undertake an extensive study to introduce "the right products for the rural markets". Interestingly, this is in line with other consumer durable companies such as Godrej and Samsung, which have recently come out with products for rural markets. While Godrej has come out with its small refrigerator Chottukool, priced at R3,500, Panasonic is launching special products such as solar lanterns, televisions and other electronic items for rural customers. Soon Kwon, managing director, LG Electronics India, told FE, "We are looking at rural expansion and we would be doing this in the next one-and-a-half years time. Size of the rural market is huge and untouched and our focus is on rural expansion."
The Indian subsidiary of the Korean electronics major said that a lot of R&D activities are being undertaken to bring out products such as refrigerator, washing machines and televisions especially for rural markets.
Kwon said, "We are undertaking a research exercise on what rural consumers really need. We have a special focus team...which will study aggressively to produce the right products."
LG, which enjoys 30% of market share, also announced its entry into the business solutions segment from which it aims to garner Rs 1,000 crore revenue by 2014. "We expect the B2B business to have a higher growth potential as compared to B2C and are expecting 30-35% growth rate as compared to 25 % growth rate of consumer electronics items. We are targeting a turnover of Rs 1,000 crore and market share of 25% by the end of 2014 in this segment." The total size of the business-to-business solutions for integrated display market is around Rs 2,500 crore and growing at the rate of 20-25% per annum.
Kwon said LG has come out with a broad range of vertical solutions. These include digital menu boards for restaurants, digital signages for retail outlets and malls, room infotainment and digital signages for hotels, video-conferencing solutions, commercial displays and surveillance cameras among others. LG will take both the direct selling and channel partner route to market these products.
LG will also be developing customer base for many different verticals, including education, hospitality, finance and governance. For this, the company has also roped in some of the prestigious clients such as ITC, IHC, Marriott and Cafe Coffee Day. "In the last two years, we prepared the whole product line for business verticals. Now we will sell 30% of the total offering directly and approximately 70% through channel partners," said Dong Pil Kim, senior general Manager (B2B marketing) LG Electronics India.