In the News
Voltas Mars LG's Summer
Topples Korean major in market share in room air-conditioners
After a decade of dominance in white goods, Korean giant LG abdicated its leadership position in India in May when it was relegated to No 2 position by Voltas in the . 7,000-crore room air-conditioner market. According to latest data from market researcher GfK-Nielsen India, LG's volume market share in multibrand outlets—a key sales channel that accounts for almost 90% of AC dealerships-—stood at 17.7% in May against 18.3% of Voltas. A year ago, in July 2011, LG was the leader, with a share of 22.6%. Samsung retained its third slot in room ACs but its market share has plunged from 14.5% in July 2011 to 10% in May 2012. The drop was a result of it vacating the window AC segment this year; now it is not far behind Japanese brand Panasonic, which has doubled market share to 9.9% in the last 10 months. Even Hitachi increased its market share from 5.2% to 7.3% in the period.
Saurabh Baisakhiya, LG's business head for ACs, said: "There could be a temporary market share loss since LG is consciously focusing more on high-energy efficient products not on the highvolume window ACs.” He added that LG has factored in such shortterm losses and that LG is targeting 10%-15% cumulative growth for calendar year 2012. He said that volume share in multi-brand outlets is not a true representation, and that LG's exclusive brand stores—some 1,400 of them—have also to be considered. According to him, LG's combined market share in multi-brand and its own exclusive outlets was 23% in May, much ahead of similar figures for Voltas. "We cannot look at multi-brand outlets in isolation," added the business head.
However, Pradeep Bakshi, COO, Voltas India (unitary cooling products business group), said the leadership in multi-brand outlets in India is more critical. "This is an effort of the company since the summer of 2007 to turn around operations and to gain back our lost dominating status," said Bakshi. Voltas attributes its strong performance to price competitiveness, a strong position in the window AC market and product innovations like an all-weather AC on which the company had spent significant marketing resources to break through the clutter. "Last year we became the second largest brand as per GfK, even though our internal analysis showed that we became the largest brand in terms of units sold in the primary market or to distributors and dealers," said Bakshi.