Close to the statue of Christopher Columbus, the man who discovered America, is the unearthing of a different kind of experience. In this prominent space located in yet another imposing shopping arena in New York City, consumer electronics $115 billion Korean giant Samsung offers consumers the opportunity to discover a new way of retail experience through its Samsung Experience stores.
Set up roughly five years back the store that spreads across 6,000 square feet were set up with the “intent to make a wow statement”. With extremely well planned layouts and a twin level, the store looks vast and expansive. The products displayed also are carefully chosen with only top of the line products get space. One section, for instance, features only products that have won awards at global forums.
It was at this location last week, which was described as the business capital of the world, that Samsung India decided to unveil the latest of its television offerings for India and yes this was not a simultaneous global launch. Rather, this was a major move in the direction towards cementing its aspirations of being a leader in the “digital technology” space, where Samsung is changing the game from the field of LCD televisions and taking consumers into graduating into LED televisions, a market that it dominates with a nearly 94% globally.
The superior promise of LED over LCDs — 40% less energy consumption when compared to traditional LCD televisions and being mercury-free and lead-free add a huge competitive advantage in the days of increasing environmental consciousness.
To repeat that dominance in the Indian market, Samsung launched its 8000 series of LED HDTVs priced at nearly Rs 3 lakh and an entry level 32 inch model that retails for about Rs 70,000. LED TVs are about 30% costlier than the comparable LCD televisions. At present, LED televisions make up only 0.2 million sets among a total of 120 million television sets that were sold globally in 2008. But this market is expected to grow exponentially to about 15 million LED sets by 2010 and to 64 million sets by 2012 nearly 30% of a market that will be as huge as 200 million sets by then. Samsung that identified LED TVs as a new growth engine early this year hopes to take full advantage of being an early mover in the segment.
In India too the market is moving in that direction. The panel television segment of which LCDs form a major part has been growing in excess of 100% every year. For example, panel televisions have grown from 0.4 million sets in 2007 to 1.5 million in 2009. Samsung India says that the LCD category has enabled the company to drive its brand presence in the TV business, outperforming the rest of the market. Samsung has managed to grow in the panel TV segment from 0.175 million televisions to 0.6 million TV sets in the same time-frame.
And for Samsung, the US market has been a success story. As Tim Baxter, president, consumer electronics, Samsung Electronics America points out, Samsung has had an unprecedented success in sales and market share in the US. From a number three players in most categories of televisions till even last year, Samsung is now the market leader across FPTV, Bluray, HTiB categories. In LED TVs, where the company is taking a lead in category creation, the company has a 94% market share.
With market leadership, even the image of the brand is undergoing a rapid upgrade. “Till about 18 months back, we were a Tier 3 brand. Now we are a Tier 2 brand and by 2011-12 we will be a Tier 1 brand as far as consumer perceptions are concerned.” And that by leading the market in future technologies like LED TVs the company has managed to create and own the category, but also to get a premium price positioning.
If global market conditions are any indication, then the company has managed to beat industry decline by maintaining growth rates. For example, the company’s consumer electronics division has managed to grow sales by 8% in the year ended June 09, when the rest of the industry has declined by 12%. And consumer relevant products, superior design and a unique retail experience have all played a big part in that success. Certainly, America has discovered Samsung.