MUMBAI: “It’s a tough challenge, but we will be an Indian FMCG major in the next three years.”
Thus spoke Vijay R Singh, managing director of South Korean electronics giant LG’s FMCG arm Indian Household and Healthcare Ltd. Today marked the the national launch in Mumbai of eight mainline consumer product categories under the LG Care brand.
Despite Singh’s confident air, LG Care is entering some exceptionally tough terrain in India in this segment. Out of the top 10 FMCG companies in India, four are multinationals players while the other two have significant MNC shareholdings, so how well LG Care’s premium product positioning built around its international experioence finds takers will have to be seen.
The launches included LG toothpastes, shampoos, detergents, soaps and diapers. These products will be available in 200 product packs spread over the mentioned categories in various sizes, packs and variants. LG Care will also be launching its cleaners, cosmetics and hairstyling products shortly. A phased rollout in all states is planned which should be complete by mid-June and will be gradually be extended to smaller towns by July.
Speaking at the launch, LG Household & Healthcare vice president C H Kim says, “India is one of the fastest growing markets in Asia. The sheer size and potential of the market coupled with the low penetration levels made it attractive for us to enter India. Worldwide LG Care has been among the top FMCG companies in about 40 countries and is growing rapidly. Our company and the products speak for themselves and we are confident that our entry into India will be a very successful one. We are proud to be here and aim to be one of the top players in the Indian FMCG market soon.’
LG Care, already a major FMCG player in over 40 countries, will pitch their sole differentiating factor as being technologically superior. Their validation being state of the art factories over 200 acres in South Korea as well as over a whopping Rs 90 billion spent in research and development (R&D). The company believes that they will be at an advantage due to their clean entry into the premium end, they being the only player in that band.
The target group being urban and semi-urban (100,000 +), LG Care for the time being is going to be the sole player in the Indian market in premium goods ensuring global standards of good living to their Indian consumers. The price range will also be placed higher than the current players, due to the fact “that our packaging will be of superior international quality, value to the consumer in terms of quality and different flavours in toothpastes and soaps” adds Singh.
With an ad spend of about 300 million, focusing mainly on television commercials (TVC’s) and the print media, and a distribution network of over 500 across the country and 40,000 retailers in the first year each getting a margin ranging between eight to ten per cent, the expected turnover for the year 2004-05 is an anticipated Rs 15000 million.
LG Care will also be pioneering the ‘umbrella branding’ strategy in India. This will be a critical success factor for the company, as this will be the first company using this strategy in India. Their consumer proposition being “Buy one and get a clean and beautiful life”
Also the running contest which rewards the winner a trip to Korea seems to be gaining popularity. Three years is the time line the company has set itself to achieve break even. Armed with data that states that the penetration for all the major categories leaves a lot to be desired among upper and upper middle class consumers, it is in this “untapped” area that LG Care hopes to make its presence felt.
Contract Advertising has bagged the LG Care account, MPG of Euro RPG is their official media buying agency and Hanmer & Partners, their official public relations agency, ‘Life’s Good’ commiserating to Lucky Goldstar (LG) seems to have their mission all set to create an Indian operation benchmarked with LG Care internationally.
With tag lines like ‘India sparkles’, ‘India shining’, ‘India smiling’, LG Care sure seems to have gotten their inspiration from the much talked about ” India Shining ” campaign. Whether India is shining or not, LG Care sure seems to have kickstarted their endeavor in India with a bang.
