Said Roh Pan Ock, President LG Electronics Romania.
In February current year when you became the President of LG Electronics Romania you were realistic and you didn’t estimate for 2009 a growth rate similar with last years, but a growth based on the optimization of products’ portfolio and on increasing the market share. Taking into consideration the present economical situation, were you forced to adjust in some way your strategy?
Despite the present economical climate, we continued with our initial strategy and now I say that it was a good decision because we managed to achieve our business objectives for this year so far, managing to have an increased growth rate of both incomes and profit in Q3 for key product categories like LCD TV and mobile phone business. These results were registered in a period of a general decrease of the electronics market and this period is not over yet but we expect to have an increasing trend for the rest of the year as well.
LG Electronics Romania registered in 2008 a turnover of USD 152 million, strengthening its leader position on local IT&C market. From the figures registered so far, which are the financial results for the current year?
Even though we don’t expect the same rate growth as experienced in the past years, we achieved to increase our efforts in order to optimize the business portfolio and maintain our market share on key business segments as plasma and LCD TVs, LCD monitors mobile communications and air conditioning systems.
In the first half of the year, the best results were registered by the home entertainment (especially with LCD TVs), air conditioning systems and mobile phones. For LCD and plasma TV categories, LG Electronics managed to increase the market share, thus, for the LCD TVs, LG maintained the second market share in the first quarter of 2009, with 24 pc value, and the first market share, of 40 pc, for plasma TVs, in the same period.
Also very good results were registered in the first half of the year for the mobile phones segment, with flagship models from different categories as camera phone, fashion or multimedia phone. For this year, we registered a market share growth for touchscreen terminals and smartphone models, from mid to premium models, as a result of the high consumers’ demand for these models.
The sales results growth on the mobile phone segment registered locally was sustained by an optimized products portfolio with mid to high-end models with innovative technologies and design. In August 2009, LG position on top 3 among the local mobile phones brands, with 9.3% market share and reached the second position on the 3G segment, among the most important producers on the local market, with 22.5% market share.
Last year, the company you represent, registered important sales for the main product categories: LCD TVs, plasma TVs, mobile phones, audio systems and home theatre system. Which segment will be the most profitable in 2009? Does the LG Romanian consumers’ profile has changed?
In terms of product categories we estimate that the TV segment will be one of the least affected. Anticipating the market evolution, we decided to introduce this year on the local market the latest innovation in the field: the LCD TV with LED backlight technology. Romanian consumers will have the possibility to choose between different LED TV models, SL9000 or SL8000.
The mobile phone segment is also one category that will always be profitable, despite of the economical context. Regarding Romanian consumers, we’ve noticed that they are become more into technologies and more educated regarding the advanced features and they are more attracted by mobile phone with touch technology as we’ve registered a market share growth for this segment. We estimate this will continue in the last quarter of 2009 and beyond and touch technology will also expand to less expensive handsets, helping drive their popularity far higher.
The LG Romanian consumers profile is always changing, but at the same time, stays the same. They are actually evolving and LG Electronics is permanently next to them in order to offer to best products that fits’ their need and lifestyle. According to a market survey realized with the help of Research International, we discovered and analyze Romanian consumers’ habits for mobile phones: brand preference, mobile phone ownership and usage, purchase process, attitudes. More than half of the Romanian consumers are style conscious and that is way Romanian consumers perceive LG as a contemporary and fun brand. The mobile phone transformed itself into a real accessory, an indispensable gadget and when purchasing a new mobile phone, beside the design, the battery duration and durability were revealed as being two of the most important features.
That is why LG introduced on the local market products that fits’ Romanian consumers’ lifestyle. This year, we have noticed that the touch screen handset segment registered a growth. This segment became more and more popular among the Romanian consumers and due to that, LG portfolio was increased with various products within this category.
For example, LG Cookie is a touch screen handset dedicated to mid-end segment, which was much appreciated all over the world since it was launch last year in November. On the local market, LG Cookie registered impressive results, being the best sold touch screen handset among Romanian consumers in May 2009.
According to you CV, you are part of LG Electronics team since 1990, and your professional carrier took you to different countries. How Romania does seems to you compared to other countries taking into consideration the IT&C industry?
Romania and Romanian people seems to me very kind and I adapt in a short time to Romanian mentality. Regarding the local IT&C market, it’s true that low-end products are still dominating. But I am sure that the segmentation shift from low grade to middle-high grade will be doing continuously as many consumers will be oriented to products endowed with high technology and smart design, according to their up-going life quality.
When I’ve joined LG Electronics Romania team, I was very impressed by the specialists working together, a mix team formed by Romanians and Koreans that are really devoted professionals, responsible and who believe in company and its’ products. Among with a very well organized process and system and a big market potential, we have a big opportunity to our future development on the local market even though the financial crisis affects also our current business, as other important industries.
For 2009, you’ve recently announced that you will start to target other business segments. Which are these segments and what financial results you want to obtain through the introduction of these on the local market?
Anticipating future trends and also, in an effort to provide innovative products, solutions and services to meet consumer needs LG Electronics created at global level the Business Solutions Company that includes a wide range of products as network LCD monitors and versatile commercial displays.
Demand is growing for large commercial displays for use in hotels, hospitals and other public spaces and LG plans to build on its existing success in the monitor market by expanding into new businesses also on the local market. Ultimately LG is pursuing to be the total business solution provider for the Romanian market.
The year 2010 predicts to be one extremely important for foreign investors. In this context, what’s your opinion regarding the evolution of LG Electronics Romania?
For next year, we aim to continue the growth on the local market and brand consolidation through a business strategy based on further strengthening consumer relations and investments in company’s competencies.
In terms of market, I believe there’s a potential for growth in products from middle-high end segment resulting as a shift from low-end in the coming period as consumers want to upgrade their life, by high technology products that also appeal to their esthetic sense.