The company plans to launch value for money products to expand its consumer base
Sony India, known for its premium tag, plans to fortify its presence in the entry-level television and home audio segments. Sunil Nayyar tells Devika Singh that the company is realigning its product strategy in these times, with plans to launch ‘value for money’ products to expand its consumer base. Edited excerpts:
As a brand that operates in the premium segment, how are you recalibrating your strategy to remain relevant in the wake of Covid-19 and the economic downturn?
We will continue to build and evolve our premium range of products; but, at the same time, we would like to maintain our presence in the entry-level segment, given the huge consumer base there. Going ahead, we plan to introduce products at some very competitive price points. While we don’t intend to launch products priced lowest in the market, unlike last year, we will offer products that are great value for money. This will help us expand our base and maintain our focus on premium products.
The Sony Bravia KDL-43W6603, a 43-inch smart TV that we launched recently, is an attempt in that direction. This segment has seen growth recently, as consumers who are moving to smart TVs are opting for smaller screens. So, we have reoriented our strategy, and would like to be a strong player in it. In the large-screen space, especially 4K UHD, however, we will be pushing our offerings with full force.
How has the consumer’s buying behaviour changed in recent months, in your view?
Although the end of March and April were tough, as everything was closed, we have seen a resurgence in demand for our products in May and June. Our product categories, such as television and home audio, are seeing increasing sales, matching last years’ numbers. Consumers are spending more time watching content on television, and the variety of HD content being offered by OTT platforms has led to a surge in demand for bigger, better TVs. The market for large-screen TVs is growing seven to 10 times faster than that of 32-inch TVs. The demand for PlayStation has gone up threefold. The demand for headphones is also up, as people are working from home.
We have also repositioned our pricing by offering discounts, and this has increased our value proposition. Another trend we have observed is that people are browsing less in stores and making purchase decisions quickly; so, our conversion rate has gone up by five times. We have also launched a website that connects our stores with customers, and they can order products directly.
How much does the digital imaging segment contribute to your revenue? How big is the market for cameras in this age of smartphones?
We get about 17% of our revenue from digital imaging, 18% from audio, 60% from TVs, and the rest comes from other product segments. Our TV range used to contribute more than 70% of our revenue some years ago, but we have been trying to increase the share of other product categories. While it is true that the market for casual photography has moved to smartphones, there are other emerging segments. For instance, 70% of the camera market in India is driven by weddings. Similarly, wildlife and fashion photography are other emerging segments. The growing trend for video blogging has also contributed to this market. This particular category has taken a hit recently, as weddings are not being held and people are not venturing out. We expect the demand to return by Diwali.
The audio market is bustling with several new players in the fray. How is Sony tackling the competition?
Audio is a broad market, but Sony dominates the home theatre market in India with a 60% share in it. We also launched an entry-level product in this segment, and expect that would expand our share to 70%. The Sony WH-1000XM3 headphone is also doing quite well in the category. We have also entered the truly wireless segment with the launch of WF-SP800N and the WF-XB700 earbuds.
However, in this segment, offline contributes a major share. We have been making efforts to drive sales for these products through online channels. We have seen a downtrend in the sale of party speakers recently, since the country is not in a party mood, but it could pick up with time.