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The Rediff Business Interview/ Joo-Bum Chun

'India cannot be considered as one market'

J oo-Bum Chun, president and chief executive officer of South Korea's Daewoo Electronics -- the only Korean company to make it to the 1997 Fortune magazine's ''the world's most admired companies' list'' -- rose from the ranks. In 1985, Chun was the general manager of Daewoo's video recorders export division and went on to become its managing director by 1989. In 1996, he moved to Germany as managing director and CEO of Daewoo Electronics Europe.

Under him, Daewoo Electronics ran up a sizeable lead in exports of five major product categories -- TVs, VCRs, refrigerators, washing machines and microwave ovens -- and recorded an average annual export growth rate of over 25 per cent throughout the decade.

But the Indian market is different, says Chun. He tends to pass on questions about that to Taik-Ho Shin, managing director of Daewoo Anchor Electronics (a 76:24 joint venture with India's electrical major Anchor). However, Syed Firdaus Ashraf buttonholed Chun soon after a press meet in Bombay to learn more about Daewoo's India plans. Excerpts:

What is your perception of the Indian market?

India has always been a good market and nobody denies it. And there is no doubt on one more fact: that the gross national product of India will increase. People's household income levels will rise. That will lead to a demand for consumer durables. Another advantage for India is that the country has skilled workers and a large number of consumers. These two things are very important for the white goods industry to grow. So, I think India has the potential (to emerge as a big market).

What efforts did Daewoo make to adjust to the Indian market in the last two years?

India is a complex market. There are so many states; and the demand varies across the states. India cannot be considered as one market. So, I have instructed the local men to evolve a strategy to target specific areas, so that we can understand more about India.

Could you elaborate on Daewoo's motto of product localisation?

We do have some professionals working on to understand the global market. We always commission experts to understand the local needs. They tell us about the shortcomings of the product. And based on that, we enter the market with our resources. I am a great believer of localisation of a product. And, I think localisation is very important for any product to succeed in a market.

Has this strategy helped in India?

We are still at the beginning. It is too early to comment. But we are picking up.

Is Daewoo trying to focus on any one product in India?

It is Daewoo's strategy that we display all our products first in the market. But in India we stressed more on colour television and the refrigerators. Even in these sectors, we are promoting particular brands. In the coming days, however, audio systems, air-conditioners, computer monitors and video recorders will also be introduced.

There is a view that Daewoo's products are beyond the reach of the middle class.

Our basic philosophy is that our products should be very durable, user-friendly, and sold at an affordable price. I mean, affordable by the general public.

Brands like Akai are offering irresistible exchange-old-for-new schemes to consumers. How will Daewoo square up?

We are not losing anything. Actually, whether we are losing or not depends on the cost of manufacturing as well as distribution. We are number three in world and that can happen in India also. I really feel that we are quite capable of competing with anybody.

The Indian consumer is known for being price-conscious. Daewoo seems to focus on value-added products. Do you see a mismatch?

India is not the only place where the consumer is price-sensitive. But I think these things, a market survey team has to study. If that is a fact, then we are ready to respond appropriately.

How long will you wait to make profits?

We have to make a black figure by this year-end. I am very particular about it. If not, the company will be not here, or the man incharge will not be here. But I don't think it will happen.

With economy in recession, do you think it is a realistic target?

What I believe is that a company if it has to survive, it should generate profits, cash. And the time one can allow must not extend for more than three to five years. It is very long.

There is a view that imported goods are more in demand than those made in India.

If that is the case, then we have to offer a quality product that can satisfy the consumer. But, I think we can persuade a consumer over a period time by systematic campaign that the imported Daewoo products are no different from Daewoo products sold in India.

Something about the automobile sector. The industry seems to be on an uphill road both in Korea and India.

In Korea, people generally replace old cars with new ones. But in times of recession, people delay the buying. They also wait for the right price, especially when it is an expensive product like a car.

Interviews