LG completes channel restructuring, focuses on retail, government

LG India recently showcased its futuristic and innovative products across categories including, white goods, audio video and IT at LG Tech show-2013. In the computing space the company has introduced its ultra-books, hybrid tablets, accessories and new range of IPS monitors. This year, LG's main focus would be retail business. It would not only concentrate on standalone monitors, which is a 75% of the IT business, but will launch top of the line computing products. LG has also exit from the mass notebook business.

Speaking on the sidelines of the Tech Show, Sanjoy Bhattacharya, product group head, IT products, LG India talked about its IT business and said, "The rationale to get into retail business is due to the slump in the assembled market as this market has been de-growing by double digit. Moving forward, we have not confined our business only to the distribution channel, but in the second quarter we are adding two more channels including TV and web based channel, to get more visibility in the consumer for our computing products. Besides consumer, we are also foraying into the government segment, by adding top 50 value added resellers."

He also added, "At LG we are looking to work closely with the government for projects like Sarva Shiksha Abhiyan (SSA) and rural health. So far we have not been focusing on government, but the formation of 50 VARs, would allow us to enter into the government and B2B space. The company would also provide government based monitors specification, across country. We have started development of such monitors."

On the channel front, the company has completed its restructuring. The company has significantly, cut down its billing points from 250 in 2011 to unique 29 billing points across India. However, this decision has given 33% marketshare to LG in the standalone monitors. "After downsizing the channel, now we have a stable channel in place and we will not be enhancing this base any more, rather we will revive our retail outlets, which has been closed down since 2009," he highlighted.

As the company is rolling out top of the line computing products, it has planned to set up five LG exclusive premium IT stores in Bengaluru, Pune, Delhi, Noida and Hyderabad. These new outlined plans will help LG to maintain last year growth in the IT business, which was Rs 625 crore. The company is also compensating its de-growth in the DIY business, which was 33% in terms of revenue by rolling out new range of IPS personal TV monitors, accessories like mice scanners, earphones, memory stick, blu ray drives and USB based DVD writers