In an attempt to boost operations on the Romanian market, South-Korean group LG Electronics has enforced a change in strategy. Whereas the group has worked only with distributor Romanel in the past six years, it decided to waive exclusivity.
"Romanel had only 20% penetration rate of the Romanian market, while the rest of 80% remained uncovered. Thus, we decided to work with several distributors, to achieve higher penetration," said Sang Yeol Han, general manager of the local branch of LG Electronics. LG Electronics products will also be distributed by Singapore company Lead International and by the Flanco and Domo chains.
"As far as we are concerned, our collaboration with LG shall not be harmed by this decision, as our company is still determined to consolidate ties with the LG concern," said Dan Ene, marketing manager with Romanel.
With the new structure, the Romanian turnover of LG Electronics will go up from last year's $20m to $50 million this year and 100 million dollars in 2005, company officials say. At the same time, LG's market share in Romania will reach 8.5% this year and 15% in 2005, according to the general manager of the local LG Electronics branch.
"Romanel will still account for almost a quarter of our Romania turnover, while Lead International will reach 50%. In its turn, Flanco will hold about 25%," Han added.
According to Romesh Koka, Lead International CEO, the company will grow together with the international trade networks in Romania. "We will distribute LG Electronics products in stores such as Metro, Carrefour or Cora," Koka said.
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