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Kamis, 27 April 2017

LG is learning from its past mistakes in India, but there's a long way to go

LG has finally figured out how to launch a flagship phone in India.

To say that LG hasn't fared well in India would be an understatement. The South Korean manufacturer failed to make a dent in the highly competitive budget segment, and its efforts in the high-end segment were steamrolled by the likes of Samsung and Apple. The company is languishing in tenth place in the Indian market, a position that's "shamefully poor" according to LG India's MD Kim Ki-Wan.

LG's mobile woes are in stark contrast to the company's overall success in India, where it leads the field for TVs and home appliances. LG is now looking to turn things around for its mobile unit, and has stated that its goal in 2017 would be to break into the top three brands in the country. That'll be a gargantuan task considering Samsung's continued growth and the steady rise of OPPO, Vivo, and Lenovo.

To counter the decline, LG is turning to local manufacturing and creating India-specific models to attract mainstream buyers. The company is also figuring out the vagaries of the Indian handset market, judging by the recent launch of the LG G6. The phone made its debut for ₹51,999 ($810), and LG offered an enticing ₹10,000 ($150) in cash back to those picking up the phone from Amazon India, its exclusive online partner. The launch-day offer is no longer available, but the company will continue to offer a cash back deal of ₹7,000 ($110) throughout the course of this week.

LG is focusing on local manufacturing, but it is lacking compelling budget devices.

The premium segment in India constitutes a small subset of the overall market, but it dominates the mindshare. And by rolling out attractive offers, LG is effectively undercutting the Galaxy S8 and S8+, which retail for ₹57,900 ($900) and ₹64,900 ($1,010) respectively. This time around, Samsung isn't offering any cashback deals, instead throwing in a free wireless charger to customers pre-ordering its flagship.

The spec sheet notwithstanding, two factors determine how a phone sells in India — pricing and discounts. E-commerce companies have been rolling out aggressive deals and discounts for years now in a bid to sign up users, and that has led to a mindset where customers are unhappy with paying full price for online goods. And in this context, LG has absolutely nailed the launch of the G6 in India. The phone offers great value for money at ₹45,000, and while it may not have a 10nm chipset, it makes up for it with excellent cameras backed by a gorgeous design, 32-bit Quad DAC, and 64GB storage.

The company can use the G6 as the platform to reinvigorate its India strategy, but LG needs to launch affordable phones that offer great value for money. With the likes of Xiaomi, Huawei, and Lenovo constantly pushing the boundaries in this segment, the South Korean manufacturer needs to have a standout product to affect real change in its market share.

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