Not just hot air
The goal of Daikin Industries, the biggest air conditioner maker in the world, is to produce the world’s quietest air conditioners. It requires advanced technology and tremendous investment. However, consumers in India are not interested in the hype. All they want is cool air. As such, Daikin products are not very popular in India.
Currently, LG Electronics has the biggest market share in the Indian air conditioner market. As diseases like Malaria and dengue fever are a concern in India, LG Electronics presented a model that keeps mosquitoes away with ultrasonic waves. LG models boast bright patterns that appeal to local consumers. The meticulous localization strategy hit the mark.
What made Japan an “electronics kingdom” is the monotsukuri innovation that concentrated on producing the best possible products. However, since the 1990s, the same concept has led to a spate of arrogant Japanese companies that value high-end products over anything else. In contrast, Korean companies such as Samsung and LG have analyzed the tendencies and demands of local customers and produced what they actually want. Korean companies began taking over the markets that Japanese companies once dominated.
Japan is starting to change. What I hear often as I cover the Japanese economy is kototsukuri, the concept of creating added value by improving the designs, software and service of products. Just like Korean companies, they work on the strategy of planning and selling products that respond to the demands of consumers.
Switch, which saved Nintendo, is a notable example. It is a game console that can be connected to a television or monitor but is also portable. Users can play games anywhere, on the go or in bed.
Suzuki became the leading carmaker in the Indian automobile market by focusing on affordable, small models. Unicharm packages their products in yellow instead of the usual pink in Indonesia, targeting female customers because stores in the country tend to have dim lighting. Panasonic offers energy-efficient appliances in Southeast Asian countries, where electricity costs are high.
LG Economic Research Institute’s senior researcher Lee Ji-pyeong, an expert in the Japanese economy, diagnosed that the improved competitiveness and productivity of Japanese companies led to the recovery of the Japanese economy.
It is a serious threat to Korean companies destined to compete against Japanese rivals. There are signs that many manufacturing industries, aside from semiconductor and display, are falling behind in their competition with Japanese companies that have been upgraded through kototsukuri.
Just like the arrogant Japanese companies of the past, some firms need to reflect on whether they mistakenly thought that they had gotten ahead of Japanese rivals when their improved performance was actually temporary. I may not be the only one concerned by the revival of the Japanese companies I once thought were dying.
JoongAng Ilbo, March 16, Page 30
*The author is a deputy industrial news editor of the JoongAng Ilbo.