Samsung remains cautiously optimistic despite recession

New Delhi: While many companies are putting in place policies for
getting over the downturn Samsung strongly believes that the worst is behind the
industry. In a candid interaction Ranjit Yadav, Director-IT Business, Samsung
India said, 'Q4 last year was troubling, especially November which was bad for
everyone and December did little to lift that pall of gloom. However, there has
been some positive traction from Jan 2009 onwards. The mood is cautiously
optimistic.'

While the channel in general is worried about the impact of the slowdown on
business, Yadav maintains that channel associated with Samsung is really doing
fine. 'We have all witnessed what has been happening in the market, but to put
it plainly the market was over leveraged, and cost correction was bound to
happen. Keeping the situation in mind, we have actually sat and reviewed all our
important partners and let me tell you that all our important partners are doing
fairly well.'

So what is the strategy that Samsung has to ensure that their channel
ecosystem does not suffer during downturn? 'At this point in time we are looking
at managing the business fundamentals on a very short term month-to-month basis,
ensuring that our channel emerges stronger. We track our stock levels with the
distributors, regional distributors and even the channel partners We encourage
our partners more to sell out rather than stock in, so we ask our partners to
maintain lesser stock so that they are in a position to sell the products
easily. In fact, we are not even averse to channel doing short term cash
business transactions. That way the partners are not under any kind of pressure
from us.'

Samsung India has advised its channel partners to stock less in view of the
global slowdown that has affected the IT industry across the supply chain. In
order to ensure smooth and healthy business the company has propagated that the
channel partners, regional distributors and its national distributors reduce the
level of stocks lying with them. The company is encouraging its channel to do
more short term cash business and maintain stocks for no more than 15 days so
that the partners feels less burdened in times of crisis.On the agenda for the
next year is to garner marketshare for the newly launched range of netbooks. The
company is looking at strengthening its presence across the top eight cities
including Delhi, Mumbai, Chennai and Bengaluru.

Talking about the product offerings Yadav elucidated,'We wanted to complete
our product offering in India as we had anyway been selling these products
globally very successfully. We felt it was the perfect time to launch because in
the end we believe that the customers today are looking for a choice and if we
are giving them the right kind of product they will buy it. The market
turbulence affects those who have very high marketshares and it has not affected
us since we have just entered this segment. We believe that our customers
believe in our brand and will prefer it over others. We are in a situation where
there are many partners who want to sign up with us but we cannot extend our
products to many of them at this point. We are going about it step-by-step and
will focus on the top eight cities and ensuring that what we are offering our
customers is compelling and different.'

The company will also lay major thrust on its LFR tie-ups to ensure better
delivery and support to end consumers. 'LFR is important for us and we have good
relations with some of the LFRs right from Chroma, Ezone and we will expand our
ties further. We will also open various Samsung Digital Zones and dedicated IT
brand Shops in markets like Nehru Place that will focus on selling high-end
products. We will have IT brand shops in these 8 cities that will emerge as a
business opportunity for our partners as well. We want to do more of the
business with the partner who wants to do more with us,' added Yadav.

That apart Samsung is also eying the upcountry markets and will expand its
footprints for the laptop range in the class B and C-cities. They plan to open a
number of IT brand shops across the country also. In addition the company has
also launched 20-inch wide format monitor in the market in their bid to help the
market graduate from 19-inch model.

He further mentioned that upcountry growth will continue and it will outgrow
the growth percentage it witnessed last year. 'Our monitor and components
business has seen huge growth in the upcountry. We also have good penetration
rate as far as the printer business is concerned. This growth will continue in
India for a long term as the disposable income is going up. The upcountry market
is under serviced and with broadband coming and Wi-Fi penetration, the upcountry
market will witness huge growth. The average prices of products has also come
down and this will further boost business,' opined Yadav.