Panasonic ups festive season marketing budget, spotlight on Karnataka

Apart from discounts, Panasonic’s festive offers this year centre around offering consumers assured scratch-card gifts with their purchases of home appliances


The south contributes 31% of overall revenue for Panasonic in India, highest among the four zones.
The south contributes 31% of overall revenue for Panasonic in India, highest among the four zones.

Bengaluru: Panasonic India Pvt. Ltd is spending more to woo Indian shoppers this festive season, which it predicts will be better than last year’s. The Japanese TV brand’s Indian arm is investing Rs.85 crore in marketing for the season, up from roughly Rs.70 crore last year.

“This year, demand (in India) is going on very well and I’m sure it will improve from here on,” Manish Sharma, president and chief executive of Panasonic India and South Asia, said in an interview on the sidelines of a press conference.

That sentiment was echoed by retailers such as Mumbai-based Vijay Sales and Infiniti Retail Ltd.’s Croma in a Mint report earlier this month.

“The demand for this market has gone up. New technology in the LED and Smart TV categories were all pricey and people were not willing to invest in it earlier because it was relatively new. But the prices (for those) have now come down a lot,” said Harminder Sahni, managing director at consulting firm Wazir Advisors.

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“Overall, monsoon being right, pay commission coming in, and now the stock market is also doing well– all this has helped. There is money in the pocket (of the consumer) and the confidence that things will get better,” Sahni added.

Apart from discounts, Panasonic’s festive offers this year centre around offering consumers assured scratch-card gifts with their purchases of home appliances. Extended warranty and consumer finance deals are also part of its plans for the season.

“The last couple of years have not been good in terms of growth. But a correction will happen,” Sharma had said in an interview with Mint in June. That correction is now happening, he said on Tuesday, adding that it will be led by the TV segment which is growing phenomenally not just for Panasonic but the entire industry. He pegged the year-to-date growth of the TV segment at about 20%. “Talking about this season, I see growth of 30-35% for this (TV) industry,” he added.

Of TVs, 32-inch LED TVs still contribute the most (35-40%) to sales at an industry level but there is a rapid increase of sales in 50-inch LEDs and beyond, Sharma added. Growth in the 32-inch category is about 10% over last year while the 40-inch+ categories are almost doubling every year.

Panasonic is targeting about 65% growth in TVs from Karnataka alone. The south contributes 31% of overall revenue for Panasonic in India, highest among the four zones.

Karnataka is the company’s fastest growing market. Year-to-date growth this year for Karnataka is about 70% over last year. In comparison, overall the company’s year-to-date growth over last year was in excess of 30%.

Last year, Panasonic India’s revenue was about Rs.8,700 crore out of which about Rs.4,000 crore were from consumer durables. It is now targeting Rs.4,800 crore for the segment, up 20% from last year and is hopeful of that growth rate hitting 30%.

Still, there are challenges. Consumer affordability is one of them. People are spending more on smartphones leaving less discretionary spending available for other purchases, according to Panasonic.

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Consumer finance offers are key to wooing customers. While the company’s other discounts and warranty offers are the same across India, when it comes to consumer finance, it is tailor-made for specific locations.

And, of course, the other challenge comes from online retailers like Flipkart and Amazon, which can offer steeper discounts. But Panasonic’s Sharma said that is “momentary” and does not eat away his company’s market share.

“Only 1.5% of total sales for Panasonic’s consumer durables segment overall comes out of the online space. As far as value-added products are concerned, for example high-end smart TVs, the customer wants to have a touch-and-feel experience and assurance as far as the back-up or warranty is concerned.”

Online sales account for only a fraction of total sales even at other large TV manufacturers like LG, Samsung and Videocon.

Amazon and Flipkart are also expecting a jump in sales of home appliances. Flipkart estimated that as much as 25% of sales of all LED TVs, 10% of all washing machines, refrigerators and air conditioners (ACs), and 40% of all microwaves will happen online next month, Mint reported in early October.

Mihir Dalal, Sapna Agarwal and Sounak Mitra contributed to this story.

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