Samsung Electronics will open its innovative home appliances think tank ‘Project Innovation Team (PIT)’ in Russia as early as within the year and set out to increase the number of PIT locations to eight. The company’s decision, as such, reflects the will of CEO Yun Bu-geun for CE (Consumer Electronics) Division to target the market by aggressively expanding R&D despite instability in the emerging markets, such as Russia.
According to a high-ranking officer from Samsung Electronics, the company will open PIT and ‘Lifestyle Research Lab (LRL)’ in Russia as early as within the year. PIT and LRL were organized in 2006 and first installed in San Jose, U.S. in 2007. Since then, this think tank has been established in seven countries including the U.K. China, India and Singapore. Last year, they were opened in Seoul, which is under the management of Korean office, and Sao Paulo, Brazil that has control over the South American market. In addition, a small number of supporting staffs were sent to Johannesburg, South Africa.
Each PIT and LRL has around ten people working full time to collect localized product development ideas and study commercialization feasibility. Samsung Electronics’ market-leading products, such as ‘smart camera’ for real-time photo transmission using Wi-Fi and ‘French four-door refrigerator,’ which has been ranked No. 1 in the North America’s premium refrigerator market so far, were proposed by PIT and LRL. In particular, the world’s first pre-wash washing machine ‘Active Wash,’ which made headline at the CES 2015, and ‘Water-wall Dish Washer,’ which drew attention in last year’s CES,’ are also the works of PIT and LRL.
“The pre-wash function of Active Wash was achieved by commercializing a proposal from PIT in India,” said a Samsung Electronics source. “In case of Water-wall Dish Washer, the function to take out all utensils by pulling out the one at the very top (basket for utensils) was developed by PIT and LRL.” As for the curved concept of Galaxy Note Edge, a smartphone, the idea was first conceived by PIT in the U.S. six years ago. .
With the opening of PIT and LRL in Russia, Samsung Electronics will secure a basis to more conveniently identify the tastes of consumers in Eastern European market where the Commonwealth of Independent States (CIS) are located. In particular, while retrenchment is practiced across the group due to weakening of management environment, the will of Samsung’s management ‘not to give up on R&D’ has been a considerable help, according to sources. In fact, although Samsung Electronics’ sales in the third quarter last year decreased to that of a year ago, its R&D ratio was a record high at 7.75%.
Although economic uncertainty grows as a result of the economic crisis triggered by low oil price, Samsung Electronics’ decision to preemptively target the Russian market has been reflected to a considerable extent. “We must promote differentiation especially when the economic conditions are unfavorable,” said CEO Yun Bu-geun during a press conference at the CES. “By doing so, we will be able to encourage customers to make purchases.”