The Americans envy their splurge all around the world, the Europeans couldn’t cease them off, the Japanese hats-off their success story and the Asians still trying to swallow their market takeover.
South Korea is popularly known as the ‘Land of the Morning Calm’ but the Korean consumer durable majors are showing no calmness to take over the world. As the world is busy understanding the astounding growth rate of China, fastest growing economy of the world, the Koreans slowly but steadily weaving their own success story.
After their strategic foray into the Indian economy a decade or so back, Koreans majors like Daewoo, LG, Samsung and Hyundai have out-flanked the competition in many consumer product categories.
Still world is trying to figure out what makes Korean consumer durables so adaptable that the colour of the soil becomes trivial as Koreans walk-over local competition to emerge numero-uno?
Daewoo got enmeshed in serious problems back home in Korea just when it revved up to participate in the great Indian auto race in the late 1990s. The biggest success story for Koreans in India so far is the emergence of auto company Hyundai, which put up a state-of-the -art manufacturing facility in the state of Tamil Nadu with a capacity of 1, 50, 000 cars. It was the first major auto company to scare ‘immortal’ Maruti off the peak. Hyundai rolled out Santro in 1998, which became India’s second largest carmaker in a span of over seven years. The splurge in the demand of its cars has forced Hyundai to mull up another plant which is expected to come up in Tamil Nadu only with a capacity of 5, 00, 000 cars.
However, the segment which the Koreans have really dominated is the so-called white goods comprising colour TVs, washing machines, refrigerators, microwaves etc. Korean march in the white goods segment was sparked off by the Samsung Electronics that got going in late 1995. LG followed the suite and commenced their operations in 1997 and within just four and a half months, it had a nationwide launch of its products and the result is for everyone to be seen. LG and Samsung today accounts for one in three of colour TVs, half of the washing machines, microwave owens and frost-free refrigerators sold in India.
The relentless Koreans roll on with complete domination in many consumer electronics categories. And the bad news for the domestic white goods companies is that both the LG and the Samsung have revealed plans to scale up even further to ensure their stranglehold on the Indian market.
The upshot is that the Koreans have run away with the market barely a decade after setting up shop in India. they splurged on the marketing and sponsored high-profile sporting events like cricket. They established outposts all over the country, especially in small town and rural India- which accounts for around 40 percent of LG’s sales. The Koreans thus became household names in the domestic market. Looking ahead, Hyundai has made its small car production the hub of its global operations. Samsung and LG are also the export hubs for their parents’ south-west Asian operations.
For all the Indian durable companies Korean success story menacingly affirms an important element - that all the Korean durable majors have a long-term commitment to India. They are able to convince people here that they are here to stay and not to book-profits and pack up their bags. Unlike neighbouring Japan, South Korea made up its mind faster to come here. While LG and Samsung were busy expanding their capacities, their Japanese rivals were fixated on China.