LG enters Indian healthcare market

Thursday, 01 July 2004, 19:30 IST
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BANGALORE: LG Care, the $1.5 billion subsidiary of the Korean firm, has entered India's healthcare and household market with seven premium products in the FMCG segment. The Korean firm has tied up with Chennai-based India Household and Healthcare Ltd (IHHL) to introduce LG toothpaste, shampoo, detergents, soaps and diapers. It also plans to soon launch LG cleaners, cosmetics and hairstyling products in the domestic market. Riding on the success of LG consumer electronics, IT and telecom products in the subcontinent, LG Care is shipping products from Korea after customising them to meet the needs of Indian consumers. LG Care will invest 1 billion through IHHL in advertising, below-the-line activities and promotions in the next three years. It has invested 140 million in advertising and marketing activities during the first quarter of 2004-05. "In a mega endorsement plan, we will sign up 21 celebrities from diverse fields such as films, sport and TV to promote the products," said IHHL managing director Vijay R. Singh. Promoted by Singh and K.P. Jayaram, a non-resident Indian businessman in Saudi Arabia, IHHL will tie up with the State Trading Corporation (STC) soon for raising 1.25 billion through letters of credit to import LG Care products. "Though we are importing LG products at a hefty duty of 56-60 percent, including CVD (countervailing duty), we are pricing them at competitive rates to penetrate the growing healthcare and household product segment," Singh said. Claiming that the company was willing to absorb losses to break even after the third year, Singh said the game plan was to create an Indian operation with LG Care internationally and emerge as a formidable FMCG major across key consumer product categories. As one of the fastest growing markets in Asia, India offers an attractive market for LG Care because of its sheer size and potential with low penetration levels. "We aim to be one of the top three players in the Indian FMCG market by 2006 with at least 12 other products in healthcare and household segments. We are targeting a turnover of 1.5 billion in the first year of operations and 5 billion in the next three years," Singh said. After a soft launch in Tamil Nadu three months ago, IHHL has expanded its distribution network to 14 states in four regions of the country and plans to cover other states by the yearend. Holding distribution license for the SAARC region, IHHL intends to enter the neighbouring countries of Sri Lanka, Bangladesh, Nepal and Bhutan.
Source: IANS