Once unrivalled, Japan?s consumer electronic firms are facing increasing competition from cheaper Korean and Chinese producers in particular. For instance, Panasonic recently announced plans to cut another 17,000 jobs and close up to 70 factories around the world over the next two years in a bid to pare costs and keep up with Asian rivals. Interestingly, the maker of Viera TVs and Lumix cameras is very aggressively looking at expansion in India. ?We will have no impact of the global job cuts and will continue to have deep focus on expansion in the Indian market,? says Daizo Ito, president, Panasonic India. He is the first senior Panasonic global director to be stationed in India, underscoring the significance of the company?s India operations. In a recent interaction with Sudhir Chowdhary, he discusses Panasonic India?s focus, strategy and the company?s recent initiatives. Excerpts:
How much did the Japan calamity affect your business?
Like all Japanese companies, Panasonic was also affected by the terrible natural disaster that ravaged Japan. A few employees working at Fukushima factory and Sendai factory of AVC Networks Company, Koriyama factory of Panasonic Electronic Works and Sanyo Tokyo Manufacturing Co, Ltd, which is located in Gunma received minor injuries and have been taken care off. As far as production is concerned, some of our factories were affected but as of April 28, have resumed production and some are already in full operation.
As far as the Indian market is concerned, the company?s operations have not been impacted as we source most of our products from other countries like Thailand, Malaysia and China. Panasonic India imports only a few high-end plasma television, camcorders and cameras from Japan. Thus the business here is not impacted adversely.
There has been a lot of news recently of Panasonic slashing 40,000 jobs over the next 2 years. How will India be affected?
There have been job cuts globally due to consolidation and internal alignments but that will have no impact on India and Panasonic India will continue to have strong focus on expansion in this market.
India is one of the most important markets for growth for Panasonic, and therefore an area of deep commitment. The Indian economy is on a steep growth path and in such a vibrant nation, Panasonic has launched an ambitious project to significantly increase sales. In terms of sales, it is targeting to close the 2011-12 fiscal with a turnover of R 5,500 crore.
Recent product launches and investments are a few of Panasonic?s initiatives that testify the company?s aggressive plans for India. Across all operations in the country, the company had 10,500 employees in 2010, with plans to expand to 12,650 employees by the end of 2011 and 16,500 employees by 2012. In fact, Panasonic expects to contribute about 5% of their total overseas sales by 2012 and nearly 10% by 2018. In the past three years in India, it registered a 200% growth and is confident of the trend for the next two years.
What is your perception about the Indian consumer and market in comparison to that in other regions?
With India surging ahead on its strong growth path, we are witnessing a fundamental shift in the consumption and buying behaviour of the core Indian consuming class. Today, while there is a significant increase in the purchasing power, the consumers are looking for value options which are increasingly becoming price plus, that is, an option which balances the variables of price, quality, convenience, consistency, innovation and shopping experience. They are not only looking for availability of products; they also want better experience, services and ambience.
India is very diverse market and has many different languages, cultures, beliefs, etc. and therefore it is hard to categorise the Indian buyer.
Panasonic recently launched its smart TV range. Do you think there is a future for Web-connected TVs in India?
The concept of smart TVs is still at a nascent stage in India as compared globally however, the term is gaining currency and Panasonic India is working to develop these products and applications. Our research suggested that most of the young customers between 16 to 35 age limit are fond of watching television while they chat and that guides towards a concept of ?the social television?. India offers a huge potential for Web connected TVs, considering the appetite of the TV viewers in the country and figures substantiate the fact that consumers are seeking to enjoy practically any digital content on any smart device. Thus Panasonic introduced flat panel TVs which come with futuristic technologies such as IPTV applications and which will enable consumers to connect with the entire world in the smartest possible manner.
at are your expansion plans for India?
Panasonic aims to reach out to maximum consumers with its wide range of products. It is also imperative to devise an effective marketing strategy to communicate the innovations to consumers. Indian consumer is evolving quite rapidly and is ready to invest on newer technologies. Panasonic will invest R 600 crore this fiscal on various brand building and marketing initiatives that will include advertising and below-the-line activities for different products. In the past, Panasonic has been positioned as a family brand and with the launch of a range of products, our intent is to shift the image of Panasonic as a youth brand.
We have just announced the opening of our first R&D subsidiary, the Panasonic Research & Development Centre India (PRDCI) in Gurgaon. The PRDCI starts its activities in line with Panasonic?s plans to make India a hub for the development of products that will contribute to the future Indian market.