Marketing gurus may have termed e-commerce "just another bubble that will burst without a whimper," but for Korean consumer electronics and durables major LG Electronics India (Pvt) Ltd (LGEIL), it seems to spell success.
According to the company, its site lgezbuy.com that sells products online has succeeded in widening the consumer base and enthused growth in the business. LG, in fact, has chalked out ambitious growth plans for the e-venture.
"We closed the year 2003 with a turnover of Rs 13 crore. The company is looking at a turnover of Rs 50 crore this year," Mr Vijay Narayanan, Product Planning Head, LGEIL, said. Agreeing that this was a rather ambitious target, he said, "E-commerce has been an unknown market for India, but today, with increasing network connectivity, to target a growth of 10 per cent would not be unusual. With better online connectivity and better usage, five years down we expect a turnover of around Rs 400 crore."
Lgezbuy.com was created in 1999 to provide the NRI customer good value propositions. Today, even domestic consumers are using it. This mode of service is most frequently used for gifting purposes. The products that see maximum sales through the e-model are microwave ovens and DVDs, followed by refrigerators and air-conditioners.
According to Mr Narayanan, it is the ease of use, simple interface and 100 per cent secure transactions that have made lgezbuy.com the most preferred e-commerce site for NRIs.
While the company is upbeat about the e-venture, according to Mr R. Ravi Shankar, Senior Vice-President, Stakeholder Management Division, TNS India, "Lgezbuy is more of an information disbursement tool. Customers can access information on all LG models, make enquiries about the dealer network closest to the consumer. Buyers also get to compare features and prices across the entire range of products, while actual sales takes place at the dealer outlet."
Disclosing future plans, Mr Narayanan said the company had entered into tie-ups with banks such as ICICI Bank, HDFC, UTI, Bank of Punjab, IDBI, CitiBank, Centurion Bank and Federal Bank. "We would soon offer account holders of these banks the facility to directly buy these products through Internet banking. The company proposes to start this service in the next 10 days," he said.
LG also has e-partners in fabmall.com, rediff.com, indiatimes.com, and indiaplaza.com, which can be used for ordering a product from the company's stable, Mr Narayanan said. Commenting on the mode of payment used by consumers, he said, "We allow all modes of payment. However, 80 per cent of consumers use credit card facilities."