Korean Brands Popular In India

“Even though many foreign products have poured into the Indian market for the past eight years since India opened its domestic durable goods market, it was Korean products that dominated the market after all.” This was the headline of the UPI news network, as reported in Colkata, India on August 11.

The article continues, “Three major Korean corporations – Hyundai Motors, Samsung Electronics and LG Electronics- could not only play a dominant role in the Indian market with some innovative strategies, but also beat other multinational and Indian competitors. The brand image of Korean products is far from the one formed back in 1990s when those were recognized as being cheap and mass-produced.”

The article was accurate in describing the brand image of Korean products when Korean corporations first made their entrance into the market in the mid-1990s. At the time, Indians did not know anything about them. However, Korean companies have used that weak point as an opportunity to break into the Indian market, where they are now considered an integrated IT powerhouse.

Samsung and LG did not just sell TV sets, washing machines and computers, but went so far as to display remarkable high-tech home-networking innovations such as refrigerators that have Internet capability and cell phones that are able to record DVD movies. As a result, Korean brands are appealing to the majority of Indian household buyers.

According to a report released by KOTRA on August 11, LG Electronics` sales revenues for last year stood at 717 million dollars, twenty five times higher than that of 1998, while Samsung Electronics also recorded a twenty-fold increase in sales revenues, with 650 million dollars. Hyundai Motors has ranked second in the Indian automobile market since 1998, selling more than 350,000 units.

This year Korean exports to India are in the process of rising even more. Exports to India during the first half of this year stood at 1.318 billion dollars, up 112.1 percent compared to the same period last year.

Korea has now jumped up to fifth, from eleventh last year, in its market share of India. Cell phone exports showed an especially remarkable growth rate of 2880 percent compared to the same period last year, with some 260 million dollars of exports.

On the secret keys of such achievements by Korean businesses, experts believe, “They did not spare any money in the research and development to specifically customize products for Indian consumers.” For example, Samsung Electronics introduced a woofer-sound technology preferred by Indian people while LG Electronics developed an electronic wave-proof product for their health.

At the front of exporting state-of-the-art technology, Korean companies are much further ahead of other multinationals. Local sources say, “Sony is far behind Korean companies in introducing its new products into the Indian market.”

KOTRA`s New Deli Trade Director Gang Sung-gap said, “India plans to lower its practical duties from an average 40 percent to 20 percent for the next fifteen years and permitted foreign shares of up to 100 percent. This shows how aggressively the nation is trying to open itself up. India is very advanced in the high-tech industry, as it is the world`s second largest software manufacturer, and thus it has enormous demand for related equipment.”

Mi-Kyung Jung mickey@donga.com