Squeeze on profitability amid tight market conditions and rising disposable incomes has led the Rs 6,500-crore LG Electronics to sharpen its focus on the premium segment of durables and appliances this year. “The next few months will see a roll-out of high-end products across categories.
We are perceived as only a price-led firm; which is not true. It's a perception we want to change,” LG deputy MD Moon B Shin said. The premium products it proposes to introduce over the next six months include 8-kg and above front loading washing machines, threedoor refrigerators under the French Dios sub-brand and wireless home theatre systems.
Other focus areas will be laptops, Net-enabled microwave ovens and mobile phones with 3G technology. Within CTVs, it has introduced 71-inch PDPs and wireless LCDs priced at Rs 99,000.
Earlier this year, LG had rolled out PC notebooks priced in the range of Rs 95,000-Rs 1,25,000. According to industry data, sales of products like LCD and plasma TVs, frostfree fridges over 550-litre, and split ACs have grown three-fold in two years. Thanks to easy financing options, growth is also being derived from markets other than metros.
Analysts said durables firms are being forced to focus on value growth since spiralling input costs and a squeeze on margins have been dampening value growth over the past few years. LG's forthcoming premium range will be introduced under existing umbrella brands such as X-Canvas CTVs, Dios refrigerators, Whisen ACs and Tromm washing machines.
The new range is expected to be priced at least 30-40% higher than existing products. LG is now allocating additional investments for manufacturing premium products like LCD TVs and plasma TVs, Shin said. For LCDs, it is setting up a new manufacturing line on a Rs 4 crore-investment.