Samsung, which sits in the second tier of electronics companies, is banking on Hong Kong's thirst for innovation to reach its goal of entering the top tier by 2005, alongside the likes of Sony and other Japanese rivals.
According to the company, investment in overall global marketing is expected to exceed $900 million this year, including television and print buys, as well as online marketing, retail promotions, collateral and point-of-purchase displays. The branding investment is a 21 per cent increase on last year, and includes a $200 million global advertising campaign.
Steven Yu, general manager at Samsung Electronics, says demand for traditional home appliances is waning. However, he believes consumers in Hong Kong are more partial to innovative products, such as colour LCD mobile phones and wireless handheld PCs, than their Asian counterparts.
"We will try to utilise Hong Kong as a hub to go after the whole region, including Greater China and Asia-Pacific. We have done extensive research and looked at different markets, but we found Hong Kong was the best place to market these types of intelligent products, says Yu.
"People in Hong Kong are quick to take on the latest technology as long as they see its benefit. Unlike the traditional markets like household appliances, which is saturated, we are seeing big demand in the IT area. The hot topic at the moment is digital convergence."
The company's recent FCB-developed global campaign - DigitAll Experience - speaks of just that. It shows how products combining communication, entertainment and information are becoming a part of people's everyday lives.
The company's double-digit growth this year is largely due to IT and visual products. Indeed, the demand for new products such as plasma screen television sets - intended for corporate use when they first hit the market some three years ago - has seen buying patterns change considerably over the past year. "Now, consumer sales make up 60 per cent of plasma screen sales in Hong Kong, with corporations accounting for the other 40 per cent. In the US, it is still an 80 to 20 ratio in favour of companies, explains Yu.
Digital convergence products are gaining popularity partly due to space limitations in Hong Kong homes. Samsung's TV monitors with internet access are being well received, says Yu, adding that the company has gained considerable market share, ranking second among suppliers of LCD monitors in the region.
"Hong Kong homes are very small and so if consumers can get the functions of two products in one, they want it. It's not the same as in the US, for example, where people still want big, wide televisions. The other area where we see potential in Hong Kong is in home networking," says Yu.
Samsung is already in talks with property developers who want to offer smart homes and services to buyers in a bid to combat the slump in the property market. The first smart homes featuring Samsung's network solution products - such as internet refrigerators - are scheduled to hit the market at the end of next year. "Our marketing strategy is to introduce these products to show people Samsung is coming into a new business area - home networking. Although the market may not yet be ready, we want to act now and we want the brand to be associated with innovation."
