Japanese consumer electronics major Panasonic has a very clear strategic intent, and that is to enhance its appliances portfolio for which India has been identified as a developmental hub. Be it innovation, R&D or exports, the company aims to mould the country into its offshore delivery centre. Recently, Panasonic India intensified its commitment to the […]
Japanese consumer electronics major Panasonic has a very clear strategic intent, and that is to enhance its appliances portfolio for which India has been identified as a developmental hub. Be it innovation, R&D or exports, the company aims to mould the country into its offshore delivery centre. Recently, Panasonic India intensified its commitment to the government’s ‘Make in India’ vision by setting up its maiden refrigerator factory, situated at its Technopark manufacturing facility in Jhajjar, Haryana. Tetsuro Homma, CEO of Appliances Company and senior managing executive officer, Panasonic Corporation, and Manish Sharma, president and CEO, Panasonic India and vice president of Appliances Company, Panasonic, spoke to Sudhir Chowdhary on the company’s plans for the Indian market. Excerpts:
With Panasonic completing 100 years, what is the way forward?
Tetsuro Homma: Panasonic as a brand is growing rapidly and, globally we have grown our revenues rapidly. In terms of global growth strategy, we have reiterated our focus towards the B2B end of the business, a category which contributes 70% to our global revenues. We have decided to move our business from traditional consumer business to B2B markets of automotive such as electric vehicles, housing which includes city development and the enterprise business technology.
Our main markets for growth will be Japan, China and Asia because of the potential of markets there. For Appliances Company, in terms of profit expansion it is the third consecutive year and, with respect to revenue expansion it is the second year. We have a very firm business portfolio and are firmly on a high growth trajectory.
Manish Sharma: India continues to remain the corporation’s fastest growing division within the appliances segment. The growth has been quite significant for us in the country, we have grown above and beyond the industry average within
the product categories of television and washing machines.
In the case of air conditioners, however, due to the implementation of GST during the crucial summer period and the uncertainty of the inventories, the industry grew in single digits and so was the case for Panasonic India. However, in other categories we are growing significantly higher than the industry, so in that context our market share has definitely expanded.
What are the current technology trends in appliances? When do you see IoT being adopted by the Indian consumers?
Homma: We have been working on the IoT technology for a long time and in the past five years we decided to bring in the television business. Many of our engineers are currently working on IoT for the televisions. However, we decided to first implement IoT towards the B2B business and thus, introduced through remote control and remote monitoring for suitable markets.
Today, in markets such as Japan, Taiwan and China we have over 5,000 monitoring devices across supermarkets and convenience stores. Gradually, we are introducing IoT in appliances businesses. But, consumers here have to pay an extra amount for the value added offering for IoT appliances. In China, surprisingly, customers are paying money for just connecting to IoT appliances. In India, we have already launched our R&D centre in Bangalore and soon we will find ways to convince Indian customers also to do the same.
Could you please specify if there’s any specific area of technology such as IoT, Artificial Intelligence, virtual reality, etc., that will be the focal point for Panasonic’s R&D and innovation?
Homma: Primarily, Panasonic is a tech company and from the point of view of appliances, we are focusing more on robotics, AI and IoT. In terms of robotics we already have robotic vacuum cleaners in Japan, China and other Asian countries. These vacuum cleaners in Japan has been launched from a business-to-business side as in Japan there’s a scarcity of labour.
For AI, Panasonic last year acquired Arimo, a technological start-up company based out of Silicon Valley. Through Arimo, we are developing IoT-centric AI products for commercial and manufacturing applications, which supports Big Data and Deep Learning applications that can later be used for varied commercial utilisations.
How is India a different market from other countries? Have you developed specific products for the Indian market?
Sharma: The Indian market is different as compared to other markets as it requires a lot of customisation. With the onslaught of internet and free flow of information, the country now has a demanding set of consumers who are looking for value for money and best of performance in terms of platforms being exposed to them.
In fact, brands too are heavily investing in India and, doing simultaneous global launches and giving due preference to India. Specific customisations are needed in terms of power as the country is still a victim of voltage fluctuations, which can cause many problems for all sets of consumers. Customisations with respect to lifestyles of Indian consumers is also imperative, as their utilisations patterns are very different as compared to others while using products such as ACs and refrigerators.
What are your plans for investments in India? Where do you see India in next five years, when it comes to contributing to Panasonic Corporation?
Homma: We are always looking for additional investment opportunities not only in India but in other regions as well. India is a key market for us and not only do we have focused plans for products but, also aim at developing the product components too. Second, with respect to contribution we are looking at India majorly as a resource pool for engineering capabilities. With the establishment of R&D capabilities in Bangalore we further plan to develop and promote India as the key Offshore Development Centre for the corporation.