'This is the first time any global electronic goods company has built a full-capacity factory in Nepal'

Sung June Park, Managing Director of Nepal Office, Samsung Electronics has been with the company for close to two decades. Prior to being positioned in Nepal, he was in Singapore overlooking the South-East Asia market. And prior to that, he was in South Korea with the mobile division of the company. 

“I have been looking after various markets and when I was in South Korea I was mostly looking after the India market which is a very dynamic and diverse market and one of the largest in the world,” he says. Park came to Nepal in the midst of the Covid 19 pandemic, a challenging and unstable period for all businesses, but in less than four years, he continues to drive demand for Samsung with the enthusiasm of a professional who seeks to find opportunities in challenges. 

Park has a range of interests as an individual and is a professional in all things tech. He is a keen observer of new developments in IT besides understanding how the human ecosystem is evolving within these frameworks.

In this edition of Business 360, we spoke to Park about Samsung’s operations in Nepal and what he plans to achieve here. Excerpts:

Could you give us an overview of Samsung’s operations and presence in Nepal?

I overlook all of Samsung’s operations in Nepal. We have a very diverse portfolio here ranging from mobile devices such as smartphones and tablets to TVs and home appliances such as refrigerators, washing machines, air conditioners, among others. Besides these products, we are also engaged in hospital equipment. We have some hospital focused corporate products like x-ray machines and ultrasound devices. So, the product offerings we have are diverse in nature. In fact, when we talk about TVs it is actually divided into two sections – one is the household segment and the other is for big institutions like hotels. We have a full line-up of products in Nepal the way we have in other countries. Any Samsung product that is available abroad is available in Nepal too and the only difference is the market dynamics of each economy.

How does Samsung contribute to the local economy?

During my stay here in Nepal this is probably the biggest aspect that I have been privileged to focus on. We do provide world-class products and services in Nepal but more importantly, we want to be more engaged and a part of the community here. One such initiative was building a full-scale TV factory here. This is the first time any global electronic goods company has built a full-capacity factory in Nepal. We established the factory in April in Nawalparasi. It is equipped with the newest and most advanced equipment to assemble and build TVs. This is the initial year and we have employed 50 people and limited the production numbers but from next year you can look forward to a much bigger scale of production and also a greater number of employees. We view this factory as a very significant development because it can open up a huge industry opportunity for Nepal in terms of the manufacturing sector. For Nepal as a country to be growing and to be able to really boost its economy more of this kind of local manufacturing needs to be happening. And I am privileged and proud to be a part of this kind of initiative.

I have not only focused on building infrastructure and the hardware aspects of production and manufacturing but also on training the youth of Nepal in terms of IT knowledge. We have started a collaboration with Tribhuvan University from last year. This is a part of a global training session which we call Samsung Innovation Campus. Through this training course, we provide the interested youth with all of Samsung’s knowledge in terms of our IT capabilities. We have developed this into a full package course so that we can teach students how Samsung has actually become a leader in the fields of IT such as artificial intelligence, or big data, or IoT, or even just general programming and coding. This training programme is fully funded by Samsung for the students of Tribhuvan University.

What are the challenges and opportunities for Samsung in Nepal?

The biggest challenge in terms of business is of course and it is not limited to Nepal only but on a global scale, that economic growth has more or less slowed down. This is an external challenge that we are facing at the moment and this is not only a problem in Nepal but is more of a global problem. Economic growth has slowed down globally. When we look at Nepal alone, it has become a very competitive market as there are so many options available for consumers in terms of products, in terms of the brands of various corporates that are entering our industry – the IT industry and electronic goods market. Nepal has become a very competitive and congested market where we need to constantly showcase our core values and competitiveness to win over the minds of the consumers in terms of what is the benefit that Samsung offers to the users of Nepal.

How is Samsung adapting to the local preferences and market dynamics that you just talked about?

At Samsung, whenever we design any new product, we gather the values of feedback from the market and this gathering of feedback is done on a global scale and is not limited to only a few selective countries. We gather information on what the consumer is after, what they are trying to find in a product. We conduct this form of research in all of the countries including Nepal. The biggest aspect about Nepal is that it is a very young country. And in young countries, there are young users of IT products who are very much into the technical aspects. They want to be connected with the community; they want to be connected to their peers. They are very much socially engaged and that reflects the usage of our smartphones. These are the aspects that we try to listen to and we try to gather as much information as possible so that we can accommodate them when we actually design our products.

In terms of innovation and technology are there any recent developments or upcoming products that Samsung is particularly excited about?

One thing about innovation these days is that smartphones, whether they are Android phones or iOS phones, have become very much alike. If one company comes up with an innovation, it can be easily and quickly adapted thereby creating a monotonous form of market in terms of the product. However, we are proud to say we have been able to be on the cutting edge of introducing innovations and standing out from this kind of uniform manner of products. A good example of this is the foldable technology we introduced lately, which is one of the industry standard breaking, out-of-the-box innovations that we have made because this is an innovation where we are able to fold and bend the display. The technology behind this innovation is very complex. And we have also launched the fifth generation of foldable phones. So, over the five years, we have been able to now technically master this order of foldables. The beauty of foldable smartphones is that it is not only about showing off our technology but it is actually giving the users usability in terms of being able to use a phone that is virtually a tablet and a phone. In terms of usability, users can use the phone for their work purpose and their daily lifestyle has significantly changed due to this kind of innovation that we were able to introduce.

How does Samsung ensure the quality and reliability of its products and services in Nepal?

Whenever we launch any product, we highly prioritise the usability for the users. This basically means that when we come out with a product it should be a product which the users can apply to their lifestyles and not just some technology for the technology purpose only. We want it to be blending into the lifestyle of the users, whether it be for their working purposes or just for entertainment purpose. Hence, we do this type of usability test vigorously. We have a rigorous process for the usability test. Besides that, we also have a rigorous product test as well.

As the head of Samsung in Nepal what is your vision for the company’s growth and success here?

We want to be a brand that is loved by the consumers. It is not only about the products we launch; we want to be known to the general public as a brand that is here to stay in Nepal. As I mentioned earlier, we do not want to just manufacture and supply our products in the market. We want to be connected with the people of Nepal. We want to become more of a localised brand where people connect with us as a brand that they trust and love. These are the brand aspirations that we are trying to build. Also, the most standout aspect of our business and operation are the diverse and vast range of products that we are able to provide to the market in Nepal. It is not only about the various categories of products we launch. Even within our smartphone category, we have a full range of products that range all the way down from Rs 12,000 all the way up to Rs 200,000. Due to this full range of product availability, we are able to cater to the entire population of Nepal in terms of affordability as well as premium products. I believe this kind of range of products is something that actually only Samsung can provide here in Nepal.

What are the key factors that you think differentiate Samsung from its competitors?

We can look at it in two aspects – one is the mobile industry and the other is the home appliance industry. When we talk about the mobile industry, we have a very robust distribution system with approximately 300 local distributors spread across Nepal. We have a regional distribution system that is able to cater to the markets from the east to the west of the country. We look at our local and regional distributors as partners of our business here in Nepal. It is not just a seller and buyer relationship but a very strategic partnership relation that we have been able to build with them. This is something that maybe needs to be fact-checked, but I think Samsung is the only company which has a brand office presence here in Nepal unlike other brands that just supply their products. In terms of the mobile industry because the market is bigger compared to that of home appliances, most of the brands will be having a brand presence with.

When we look at the home appliances, what we call the consumer electronics category, we would be the only company which actually has a presence in Nepal. This is a very critical aspect because we are able to connect with the market whereas with other brands only a very simple import procedure happens. Due to our presence, we are able to go to the market and be connected, and listen to the voice of the customers, the voice of our retailers and our distributors to be able to very dynamically and quickly adapt to the changing environment of the market. This is something that stands out compared to the competition.

Besides the product offerings, what makes Samsung a market leader?

I would say consistency. Of course, the product is the backbone because if we don’t have a great, firm product it will be impossible to sustain. However, I feel more than the product it is our consistency that has been Samsung’s highlight. For instance, no other brand has been able to consistently be in this market for 20 years. It’s been actually over 20 years that we first set foot in Nepal and started our operations. What you have to keep in mind is that the market situation keeps changing with time and there are companies that are in and out of the market according to the change. The consistency part comes from the commitment of Samsung as a global unit, and as a global corporate. We have a very strong commitment that we are here as part of Nepal’s community, and not just have a short-term selling and buying relationship. So, I think this type of consistency and commitment coming all the way from our corporate level of decisions have driven us to become the biggest and most beloved brand in Nepal.

Is there any new service or product that you are about to launch?

We usually launch most of our premium products or flagship products across the year. In the first half of the year, we launch the ‘S’ series and in the later half we launch the foldable smartphones. We recently launched our foldable phones in August. However, like I mentioned earlier we have a wide range of product sections, so every segment of the product is being launched even as we speak. The next biggest launch for the entry level category will happen in November. This is a very important aspect because some brands just focus on premium customers and some on entry level customers, whereas we cater to entry, mid-segment, high-end, all segments.

Does Samsung have any policy for dealing with electronic waste? 

In countries where there is an e-waste policy and e-waste procedures implemented by the government, we fully implement them there. In Nepal, there is no such e-waste policy which is enforced and implemented at the government level, which is why at the local level we actually do not have any link coming from the consumers’ side. For the waste that comes from our company’s side in terms of various samples and testing samples, these are scrapped in a very strict manner so that it does not affect the environment. At a global level, Samsung is known to be a very environmentally conscious company. Even in our products we use waste materials. We recycle the materials that have been in the waste to produce new products. While manufacturing in the factory, materials are actually being recycled. So, this is one form of being environment friendly or environment conscious and this is something that we are driving very heavily so we can contribute to the environment enhancement aspect.

Does a mobile phone have a lifespan? Every year there is an upgrade to what we are using. Speaking from personal experience after a year the phone starts declining in performance. Is it an inbuilt mechanism of the company? How does it work?

Our endeavour is such that the products can be fully enjoyed beyond the span of two years, five years and so on. We do not manipulate anything. We try to build a product with a very long-lasting lifecycle., which is why I am very proud to say that the lifespan of our products are significantly longer as compared to other competing brands in the market. The reason behind this is when we are tuning our products, we make sure it is long lasting. The other aspect is that we have a very robust and biggest network of service centres in Nepal catering to breakages and repairs. So, we have this innate production methodology of the product where we focus on long-lasting lifespan along with after-sales service which can also contribute to the long lifecycle of a product.

Is expensive necessarily better?

Our endeavour has always been to deliver the value of a product to the consumers. Our most recent launch was the foldable phone which is priced beyond Rs 200,000. Of course, it is considered quite an expensive phone by many standards. However, more than the actual pricing of the product, we look at the value that this product can deliver to the consumers. This product has three layers of display. At the front it has a display and at the back it holds two layers of foldable display which are actually interconnected. This means that the phone is giving a value to the user whereby they can use it for multiple purposes – they can use it in the normal way that people use phones but when they open it they are going into the world of a tablet. So, this is a product which can deliver the value of a small phone as well as a tablet at the same time. This is the type of value we aspire for in our innovations. 

Since the price of the phone is on the higher side, we also have to look at the affordability aspect. To help our consumers we have very recently adopted what we call instant EMI. Previously, when people wanted to buy a phone through EMI one needed to be registered as a credit card holder and there was a lot of documentation – going back and forth between the retailer and the bank and even to their employers to obtain the needed documents and approve them. We have started a programme in association with HFL (Hulas Fin Serve), one of the leading finance companies in Nepal, whereby we were able to come up with an instant EMI which is completely hassle-free at zero per cent interest for the consumers. And this EMI programme is something that I think can really help consumers in terms of financing their purchase of our products.