CAIRO: At times when major corporations are jittery about sustaining their businesses – especially those with international reach – Samsung Electronics is looking forward to further growth in the region.
“Even though global economy is tumbling, we expect strong growth from the Middle East and Africa [MEA] region, said ChangHo Park, senior manager of Samsung’s Mobile Device Division in MEA region.
“This region is one of the fastest growing regions in the world. . Every year, we post growth rates of 50 percent, and we expect the same rate for this year, he added.
While Samsung’s mobile phone business hit a record $19.8 billion last year, the MEA region constitutes around 10 percent of global demand. “This is one of our key growing markets, Park pointed out.
Closer to home, Samsung currently ranks the second mobile phone brand name in Egypt, beaten only by the world’s first: Nokia.
“Samsung holds around 12-13 percent share of Egypt’s market, while Nokia holds more than 80 percent, stated Park. “Our mission is to narrow this gap within a short period of time.
To accomplish this, Samsung plans on offering a diverse product portfolio that will meet customer needs, both at upper and lower market segments.
“We also offer tailor-made features for the region, such as Arabic language interface and call tariff meter, he explained.
With mobile penetration rates currently hovering around 50 percent in Egypt, Samsung expects growth of more than 50 percent in the Egyptian market alone. “This year alone, we forecast our sales at 1 million mobile phone units, Park said.
But mobile phones are not Samsung’s only specialty. The company runs four lines of business: Digital Media Business (home and office appliances), LCD (panels and applications), Semiconductor (storage devices) and Telecommunication Network (mobile phones, MP3 players and computer systems).
Headquartered in South Korea, Samsung Electronics posted 16 percent growth in aggregate sales for the year 2007 at $103.4 billion. “We’ve managed to double our sales over the last four years . and we plan to do the same over the next four years, explained Benno Marbach, director of Samsung’s Digital Media Business.
However, is that possible at a time of a deepening global economic recession? “It is a little tricky but achievable, Marbach said.
“Nowadays, the global economic slowdown is getting more serious, but so far our business is robust and we expect it to remain robust. Usually at times of recession, people tend to stay home and [economize]. They don’t go to cinemas for example; and therefore, they will need to have a TV.
Currently, Samsung enjoys a global market share of 18.5 percent in TV and LCD panels. To weather current financial turmoil and continue growing at healthy rates, Samsung plans to enhance presence in markets that present ample growth opportunities.
“Emerging markets are very important because they demonstrate very fast growth, Marbach added.
To combat rising inflation rates and sustain demand, Marbach explained, “We will offer more affordable products through using cost-effective technology. For example, we plan to design slimmer products which will reduce our costs and therefore reduce prices.
He pointed out that Samsung targets different segments of consumers, from limited-income entry levels, to premium and professional business people. A diversified portfolio will enable Samsung to post further growth rates amid times of economic instability, he added.
“We cover all major technology that is out there. We don’t focus on one particular technology as other companies do.
One important reason Samsung is as successful as it is today, he boasted, is due to its sizeable investments in research and development (R&D). “Total investments in R&D amounted to $6 billion in 2006, he said.
Samsung expects around 30 percent growth in TV and LCD sales in Egypt in the coming year.
The firm inked last year a deal with Mansour Group – a leading conglomerate in the region – making the group its strategic partner and sole distributor for audio/visual and household appliance products across the country.