LG expands upcountry retail presence

Benchmarking note­-books, media center PCs and desktop PCs
as its growth engines for the year 2006, LG Electronics is planning major
expansion drive in retail sector. The company is planning to set up retail shops
in B, C and D-class towns to foster its IT products among the masses.

LG Electronics IT division logged a revenue turn over of Rs
900 crore this year and the company is hoping to meet its projected target of Rs
1,200 crore this fiscal. Incidentally, LG My PC, which the company launched in
an endeavor to metamorphose from a PC building blocks vendor to complete desktop
solution company, has not met the customer approval. Now, it has reaffirmed its
stand of a renewed focus on desktop and cleared the air of rumors that LG is not
very serious on its PC business.

Providing
more insight about the LG IT division road­map for FY 2006-2007 R Manikandan,
GM, LG Electronics said, “2006 will witness ample retailing initiatives taking
place all across the country. Primarily, it will be B and C-class towns that
will receive the lion's share of retail funds.”

He explained that when the PC was making its debut in the
home segment earlier, people used to make purchasing decision by going through
the catalogues and word-of-mouth publicity. But now they want to get first-hand
experience of the product they are going to acquire. “This is why we have
taken a con­scious decision to take further the Cyber Shop­pe concept to more
upcountry towns.”

Currently LG has 81 Cyber Shoppe retail outlets, largely
located in the metros. It is planning to increase this to 150 by mid-2006.
Manikandan informed that 50 percent of LG's revenue is expected to be
generated through retailing.

Since the company is making much noise over retail,
Manikandan gave a piece of advise for partners as well. “If channel partners
want to make above the board margins and differen­tiate themselves from the
competition, the best way is to go retail. It is high time that they latch on
retailing wagon if they want to continue business in the same stream,” he
opined.

CyberMedia News New Delhi, March 15