TECH: Timing The Product Right: SOON H. KWON, MD, LG INDIA (Interview)

Be it sustainable development or managing uncertainty, for Soon H. Kwon the trick to success is developing right products. And that’s what he is doing right now – flooding the market with eco-friendly products.

Soon H. Kwon was appointed as the Managing Director of LG India, replacing the successful Moon B. Shin, at a time when LG was finding it hard to maintain its preeminence in the Indian consumer durables and electronics space with arch-rival Samsung nipping at its heels, and a re-invigorated Sony. Just over one year and Kwon appears comfortable in his new role. 

Prior to India, he has served as the Managing Director at LG Australia in 2009, and have had some impressive stints in senior positions in Korea, US and Canada. His one directional focus is to maintain LG’s leadership in the categories of home appliances and 3D television. In an exclusive conversation with onkar pandey of honchos, Kwon tells us how LG is managing uncertainty to stay ahead of the grueling competition.

Understanding and keeping a track of ground realities is the key to enhance customer experience and increase customer satisfaction. How do you manage to stay in touch with the ground situation in the durables space?

I often visit our franchise stores. Today close to 20% of our business is coming from our franchise partners. I think LG has been more aggressive than other players in setting up franchise relationships in the marketplace, particularly because the modern trade development in India is lower than what we had anticipated. It’s slower than other countries too. So, setting up LG brand franchise network in India is becoming an important initiative for the company.

As head of LG in India how do you manage your attention when it comes to addressing the two ends of the consumer spectrum in the country – the premium consumers and the huge mass market and rural India, especially in the context of LG becoming aggressive in recent times about acquiring a premium brand imagery?
I don’t think LG alone can change the whole competitive landscape or consumer dynamics. But, we know that their is a very clear trend and customers are increasingly looking for advanced products and new technology products. There are more early adopters now. So that’s a big win and we don’t want to lose this opportunity. We want to be the leader and one who guides consumers in the right direction. Similarly, in the product development areas, we are more focussed on bringing more of the global trendy products while developing a lot of Indianised products. So at both ends, we are putting resources to lead the market.



The year has been marked with inflationary pressure and uncertain global economic conditions. Do you think these conditions have affected LG India’s sales and projections for the year?
What I believe is that the domestic slowdown in India is not the bigger threat; it’s the rupee-dollar exchange rates. This year alone there has been a 20% depreciation in rupee’s value. That’s becoming the biggest threat for most manufacturers here because the infrastructure for producing consumer durables products is not well established in India yet. We have to import glass panel to manufacture TV, compressors to make refrigerators and air conditioners. So import contribution of raw material is very high. In fact, for us it’s close to 50%. And with rupee going down that certainly hurts our budget. Although people are worried about a slowdown in India, I don’t think it will happen anytime soon as the Indian economy is still managing over 7% growth. Overall, there’s a robust strength within India.

Today “managing uncertainty” has become a corporate buzzword. How do you look at it as a business leader? Is it for real or still more of talk?
When something changes radically than your anticipation it becomes a big risk to your business. But, in our category, the product tells 80% of the success. How to bring the product on time? How to educate the audience about our products? The answers to these questions are the keys to future success. So we would like to be more diligent in delivering the product and developing new products. There’s no magic in managing your business, but in consumer durables, I believe, you have to be diligent in developing the right product for the consumer. LG’s overall market share in consumer durables is around 30-35% across product lines. And if you are selling to 30-35% of the Indian consumers it means that you have been able to deal with all consumer segments, from one-door refrigerators to those high-end ones which come with a price tag of Rs.1.65 lakh.

What is your view on the concept of sustainable development? Is it still a text book concept, or corporates are actually looking at this model of growth?
Again it’s about the product. To grow sustainably, our products need to be more energy efficient. If you look at our washing machines introduced this year, the water and energy efficiency level is already high. These initiatives to develop more eco-friendly products are the ultimate way of LG’s contribution towards the industry and the society as well. As such government of India is planning to increase energy regulation for refrigeration and compressor built products like air conditioners. Hence, when time comes and more stringent measures are taken, LG will emerge as the leader in terms of complying with government norms.