Panasonic India is eying to close the current financial year with a revenue of Rs 11,000 crore while aiming for a 14 percent growth in FY24, the company’s chairman for India and South Asia, Manish Sharma told FE in an exclusive interview. Contrary to what some might think, it isn’t the consumer appliances category, but business-to-business or B2B oriented products and solutions that contribute to majority of what Panasonic does and –is also— the main purpose that it exists.
Panasonic, which was founded more than 100 years ago, still lives and breathes by its founder, the legendary Kōnosuke Matsushita’s principles, which is to design technology that improves life and make it available in abundance at affordable cost, like tap water, Sharma reiterates, adding that “the equations may vary depending on product to product, but the goal remains the same.”
Each of its products are built around three key parametres, he explains, performance, ease of use, and reliability/durability which eventually translates into a very low cost of ownership for the end-user. This is true for appliances like refrigerators and air conditioners as well as relatively more niche-case devices like cameras such as the newly launched LUMIX S5II.
Sharma says that Panasonic cameras are already “competitive” in still photography but with the LUMIX S5II – which is a full-frame mirrorless camera— it’s going big on improving video capabilities specifically for when consumers need to capture fast moving scenes and create output which consistently does not lose focus.
Plan and purpose
Panasonic, it would appear, was born out of need for quick and thoughtful problem-solving. At a time when electrification was taking shape in Japan, the company’s founder would go on to build the first dual socket so people could— this was in 1918— simultaneously plug in two devices finally. Cut to 2023, it’s diversified into multiple businesses.
In India, the company has five focus areas. The first one, which is “potentially” the identity of the company, is the consumer appliances business. Within that, there is a major thrust into expanding the portfolio of air conditioners, Sharma says. The second focus area would be electric works – which operates under the brand name Anchor which was acquired by Panasonic in 2007. This includes switches, wires and wiring devices.
The third is a combination of the two coming together and “the reason we have recently merged the erstwhile Panasonic India and Panasonic Life Solutions to create energy efficient, comfortable and convenient” smart living solutions for residential spaces.
Panasonic also makes electrical devices for industrial applications including SMT machines and apparently “dominates the space with 35-40 percent market share in that category” in addition to automotive robots, welding machines, servo motors which get into assembly operations, so on and so forth. Last but not the least, Panasonic also has a comprehensive storage solutions business.
“Many people believe that Panasonic does consumer appliances like televisions, air conditioners, refrigerators and so and so forth but even in India, this is just about 40 percent of the total business which we do. Globally, it is only about 27 percent of total revenue,” Sharma says, which essentially means that “B2B oriented products and solutions contribute majority of what we do and the purpose we exist.”
Execution
Panasonic has as many as 11 manufacturing units in India and manufactures “almost everything that is consumed in the country.” There may be some exceptions, say for instance cameras, fundamentally because the economies of scale do not allow local production. Some B2B products, which are so niche that the global manufacturing is concentrated into a specific country, are also imported.
The company’s 75-acre Technopark in Jhajjar, Haryana kicked off in 2013 with three factories, one for air conditioners, washing machines and welding machines and in 2018, Panasonic also started making refrigerators locally there. It has been making switches and wiring devices in Haridwar since 2015 and would go on to build an “Industry 4.2-ready” facility in Sri City in 2022 to boost their manufacturing even further.
Over and above that, the company likes to foster backward integration and also hand-holds its component suppliers to establish their facilities within the surrounding areas to deliver better supply chain efficiencies.
“If you notice, over the last 7 to 8 to 9 years, we’ve been consistently investing into new factories apart from many expansions which would have happened otherwise in our existing facilities,” Sharma says, adding that “our commitment to make in India for the products which we propose in the country is very high.”
Work hard, play hard
Sharma admits that the contribution of the camera category to global camera sales would be less than 3 percent in Panasonic’s case but that is okay. Products like the LUMIX S5II, seemingly, have an even bigger purpose— sustainability.
“If you look at Panasonic, majority of what we do, which many people don’t otherwise know, is into B2B space. About 65 percent of what we do are products which are not necessarily a consumer appliance, which potentially would be our identity. Within that also, if you look at the products, they are very serious in nature, that would not necessarily go in the hands of a youth,” he says, adding that “camera is a product which helps us uplift the vibrancy which this brand deserves, being a brand driving innovation for the last 100 years.”
Cameras are demonstration of real cutting-edge technology, Sharma believes, and the performance of a product like the LUMIX S5II is evident every minute when you use it, not necessarily once in a couple of years or more and “this creates a fair sense of pride when a consumer uses it. Both positioning and perception of the brand get created with such products and therefore this is a very serious category for us.”
LUMIX S5II body price in India is set at Rs 1,94,990. LUMIX S5II kit with Lumix 20-60mm F3.5-5.6 lens will be available for Rs 2,24,990. Panasonic will also sell a LUMIX S5II combo kit with a set of two lenses Lumix 20-60mm F3.5-5.6 Lens and Lumix S 50mm F1.8 Lens for Rs 2,44,990.
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