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'TVs, home appliances to be LG's thrust area'

He's a great believer in technology. Someone who's ready to put his money where his mouth is. Meet K R Kim, Managing Director of LG Electronics in India.

He's a geek at heart and a great believer of new technology-enabled consumer devices. In an interview with Niranjan Prakash of NetScribes, Kim shares his vision of the future. Excerpts:

LG's stable already consists of a wide range of products. What will be your future growth areas?

The main thrust is going to be television and home appliances. But special focus to IT products is the need of the hour. We are selling CD drives, colour monitors and a lot of those things. Eventually, even computer and information technology appliances will become consumer products and that thin line will disappear. These sectors will grow massively and shall compensate for the consumer durable saturation. We hope to come out with a wide range of superior quality products in these two markets.

Why is that even though LG's revenues seem pretty okay today, in terms of sheer volume it is far second behind Videocon?

I must add that we don't want to be the number one in terms of the total value. As I told you, we want to be the number one in sales in very specific segments. Let me elaborate.

Take the washing machine market. We don't want to be the number one in the overall market. We want to be the market leader in the six-kg and above segment. Most of the washing machines that are produced in the country are in the 4.5-kg or even lower.

If LG's competitors grab a big share of that market, it's better for us. We want to straddle the top-end of the market. I do not want to waste my superior technology and workforce on semi-automatic and twin-tubs. I would rather sell comfort than some vicious assembly.

Why does LG plan to concentrate its efforts in low-volume markets?

Simple, to make them high volume. We have been latecomers in particular markets in the country, and we have no better choice but to be different. That is why we have such a specific focus. A low-volume market for you, but it's a high value market for us.

Will the continuous emergence of new technology, such as interactive TV or Internet-enabled refrigerators, affect your marketing? Isn't the simple consumer being forced into it?

Even though computers are everywhere these days, there are people who hate PCs - even today. We are focussing on the online shopping experience with the internet-enabled refrigerators, while still respecting that for the common man shopping is still a sensual experience.

We haven't excluded anybody - neither the people who have taken to the computer as part of his or her everyday lives, nor those who prefer the physical market, rather than the virtual one. As for shopping, the majority of people may go to the physical market - Let them go! I feel that the online and offline shopping experiences will co-ordinate with each other, rather than conflict with each other.

There are so many things like urgency, value for money, etc. South East Asia and Europe have blended both very well. The subcontinent will sooner or later take to it. LG is just ready for it before time.

You admit that majority of people still goes to the physical market, will this not affect the sale and cost of such products, in the absence of economies of scale?

Let me tell you about Korea. There, online shopping is very popular, especially among the younger generation. Young people are very busy these days - far more than the earlier generation. Either it is business or it is something else. Older people have lot more time and they might still go to the physical market. But there is a big population of working couples who are the potential targets for our online products.

Just see how things have changed today. In the past, the wife was usually a housewife, but now she is also a business lady. These couples might not have the time or the convenience of owning their own car. Thus going to the super market or picking up the grocery tends to be inconvenient at times. These are the people who would prefer online shopping. This sector is growing extremely fast.

But Korea and Japan are very technology friendly. Do you think that the Indian situation is the same?

Yes. India is an IT friendly country. If not we will drive people there. In India too we have an online shopping mall, LGIndia.com and an online sales and service consultancy, Lgezbuy.com. As I told you, we are ready. I monitor the hit-rates there as frequently as my sales charts!

What about the infrastructure problems in this area, like broadband?

No, I don't view even that as a hindrance. You know, broadband is already available in some areas. Within three years, many more people will have access to broadband.

Even if online solutions are set up, the logistics remains very bad.

I totally agree. It is the infrastructure backup that will determine the winner in this game. The problem is in the delivery, not in the ordering. In LG we have overcome that problem.

Will online interactivity be the same for mundane products, such as, breakdown service or groceries?

Times are changing. The Internet, the cyber super market -- all these are coming to India. Delivery of products or services ordered online would become a big business here too. In the United States, for example, in New York, there are companies that deliver anything or service your needs within one hour. If they do not do so in one hour, they pay a penalty. I see that happening in India soon pioneered of course, by LG.

And, how do you hope to see LG in those times?

We want to be the number one in the cyber era. As we say in the company, we must become cyber LG. Because that is where the future lies - in Internet shopping malls and in Internet-enabled products. When I sell such a product, I knit the customer in my network. This is our edge over others.

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