Japanese
electronic giants such as Sony and Panasonic count India as perhaps
their brightest hope as they battle sliding revenues, mounting losses
and crumbling valuations in their global operations, while growing their
business in India.
Sony, Panasonic and Sharp posted record losses in 2011-12 and their stocks are trading at their lowest in decades on Tokyo Stock Exchange,
but in India, Japanese companies are increasingly challenging the
dominance of Korean duo LG and Samsung in the Rs 38,000-crore consumer
electronics market. And they expect India to become one their largest
markets in the next 3-5 years. "India is completely insulated and at a high growth trajectory," says Masaru Tamagawa, managing director at Sony India. The country, which became the sixth largest market for Sony last fiscal, is expected to enter the top five this year with 30% growth in sales, the company said.
Tamagawa said Monday's fall in parent Sony Corp's share price to below 1,000 yen in Tokyo trading for the first time since 1980 will have no impact on the company's operations in India.
Its competitor Panasonic, too, is growing rapidly in the Indian market even as globally it suffered a record $9.7-billion (approx Rs 54,000 crore) loss in 2011-12, hit by global downturn, tsunami and earthquake in Japan in March last year and flood in Thailand.
The Japanese companies are counting big on India and other emerging markets as they chalk out plans to return to profits this year and grow their businesses multi-fold in the coming years.
"India is a growing market and penetration levels is much less than developed countries where consumer demand too has slowed down," Panasonic India Managing Director (Consumer Products) Manish Sharma reasons.
India: Distinct strategy
The Rs 5,500-crore Panasonic India aims to become India's largest electronics company by 2018 when it is targeting revenue of $10 billion (about Rs 55,000 crore).
The company says its plan to invest $300 million (approx Rs 1,650 crore) till 2015 for setting up a factory in Haryana besides stepping up its marketing and distribution.
One factor working for these companies in India, Sharma says, is the respect for Japanese brands.
"Japanese electronic brands stand for value and an assurance of quality amongst consumers," he says.
Retailers confirm this. KS Raman, director of Videocon Group's electronics retail chain Next Retail, says Japanese brands are generating a lot of interest ever since they reduced prices to the levels of Samsung and LG.
"Two years back, brands like Sony had 10%-30% higher pricing than the Korean brands.
Today, Japanese electronic brands have reduced their price premium-ness to drive market share," he says.
Japanese AC makers Daikin and Hitachi have gained significant market share after reducing the premium they charged over brands such as LG and Samsung last year.
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