Samsung poised for a lift-off

The company’s Bangladesh MD says it completes groundwork
Samsung aims to strengthen its foothold in Bangladesh as it sees the country as a promising market due to the presence of a large customer base and high economic growth.
The South Korean electronics giant has completed its groundwork in the country by opening a branch office and establishing a software development centre during the last three years.
It would now focus on reaching the broader segment of people through a number of initiatives: launching innovative products, opening more outlets and developing mobile applications in the local context, says a top official of the company.
“We have already finished our groundwork and now will focus on lift-up,” says Choon Soo Moon, managing director of Samsung Electronics (Bangladesh operations), in an interview with The Daily Star on Wednesday in Dhaka.
Sales of Samsung handsets rose 10 percent to 1.2 lakh in Bangladesh in the first quarter, compared to the previous three months, he says. The company also plans to sell eight lakh handsets worth around $100 million within this year.
An aggressive marketing campaign and the launch of a series of mobile phones targeting the low- and middle-end segments boosted the sales.
Samsung holds around 10 percent market share in terms of value in Bangladesh’s handset segment, says Moon. “We, however, are holding the number one position in smartphone category.”
Moon, who joined the Dhaka office in February, says Bangladesh has immense potential in information technology and telecom sectors due to its large population and successive economic growth.
“Market demand mainly relies on the population size of a country. Bangladesh has a total population of 160 million and has witnessed an average 6 percent GDP growth in the last several years, creating more demand for the sector.”
The country chief of the company says there is a lack of awareness about Samsung products in Bangladesh. “We make not only mobile handsets but all categories of electronics and IT products.”
Moon, who is leading the operations of mobile phones, consumer electronics and IT business of the company in Bangladesh, says the country is a unique market in comparison with global standards.
“Globally, we focus on selling premium brands such as high definition television sets, refrigerators and smartphones targeting the high-end consumers.”
The situation is different in Bangladesh, he says. The local market depends on basic products, such as CRT (cathode ray tube) monitors, direct cooling refrigerators and low priced handsets.
Moon, however, expects the market pattern of the IT and telecom sectors will change in the next few years as the sectors will reach a level of maturity by the time.
The consumers’ preference will also be shifted due to a rise in their purchasing capacity, he adds.
The Seoul based company with an annual turnover of more than $220 billion also aims to launch innovative products targeting the young people in the country.
“We will launch solar notebooks in June for young professionals,” says Moon who has been working for the company for more than 23 years.
“It is a unique product and we will be the first company to launch it in Bangladesh with a price tag of Tk 34,000.”
He expects the product to attract professionals, especially of 23-30 years of age, who have to travel a long way for office work.
Samsung aims to introduce the solar notebook computers as the country faces a nagging power crisis and still half of the population is deprived of electricity from the national grid, says Moon.
Besides, in terms of weather, Bangladesh is suitable for solar energy as the country enjoys longer sunlight hours.
The South Korean electronics powerhouse will initially focus on awareness building about the solar notebooks, says the official.
“In the beginning, we are not targeting big, rather focusing on creating demand for the products through promotional campaigns,”
He expects to sell around 500 pieces of solar notebooks in a month.
The Samsung’s Dhaka office is not involved in any direct sales in Bangladesh. It sells refrigerators, television and mobile sets and computer monitors through local distributors in three segments — mobile handsets, consumer electronics and IT products.
For cellular handsets, Transcom Mobile Ltd is the official distributor, while Electra International and Transcom Electronics market consumer electronics.
In the IT products’ category, Smart Technology, Index IT Ltd and Computer Source sell Samsung computer monitors, hardware and other computer accessories.
These distributors import Samsung products directly from the factories of India, South Korea, Malaysia and China and also handle the service centre activities. For mobile phones, Samsung outsourced mobile servicing to Discovery, a third party mobile servicing company.
The managing director of the company says it generally sells products through two types of shops: product wise shops and integrated brand shops.
At present, the company has 20 branded mobile shops run by local distributors to sell only Samsung handsets within the metropolitan area and would increase the number of outlets to 50 within this year.
“Globally, we sell all types of Samsung products at the one-stop outlets. But in the country, it has only product-wise branded shops due to different market structures,” says Moon.
“In Bangladesh, you have to go to one market to buy a television set, while for IT products and consumer electronics, you have to go to other markets,” he says.
“It is good. But the end-users have to spend a lot of time for this.”
Moon says: “We, therefore, would open at least two integrated branded shops in Dhaka within this year to sell all Samsung branded products such as television sets, mobile handsets, refrigerators and IT products under one roof.”
The one-stop shops run by its local distributors will display all the products of the company, attracting customers to buy more Samsung products, he adds.
The company also plans to develop around 50 mobile applications for local market this year at its research and development centre in Dhaka.
The R&D centre, which was launched last year, has offered a big advantage for the electronics giant to face the challenges in the local market.
“We are in a position to handle any regulatory or unforeseeable challenges due to having our own software development centre in the country,” says Moon.
He says Bangladesh Telecommunication Regulatory Commission (BTRC) has recently made it mandatory for all mobile handsets to be used within the country to have Bangla keypad.
“We could easily comply with the directive as four hundred Bangladeshi software developers are working at the R&D centre,” says Moon.
Samsung is the number one in the IT product segment in Bangladesh, having a 55 percent market share for monitors, around 40 percent for laser printers and nearly 30 percent for other computer accessories.
In the digital camera segment, the company witnessed 100 percent sales growth last year, he says. “In terms of the market size, the demand for camera is very low in the country as it is a very unique market.”
“Most people do not want to use high resolution cameras as they get cameras in their cellphones.”
However, he hopes Bangladeshi consumers will change their preferences and will buy high quality cameras.
On the 3G technology, the Samsung chief in Bangladesh says they are ready for the technology. “We can deliver 3G handsets for the local market whenever the regulator awards licences.”
He says most of their handsets supplied across the global markets have the 3G features.
On the growing use of counterfeit handsets in the country, he says his company is closely working with the BTRC and urges the customers to buy original Samsung handsets from the authorised distributors.

-With The Daily Star input

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