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Business News/ Companies / Japanese firms change strategy to boost sales
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Japanese firms change strategy to boost sales

Japanese firms change strategy to boost sales

 Eyeing profits: A Sony showroom in New Delhi. Ramesh Pathania / Mint Premium

Eyeing profits: A Sony showroom in New Delhi. Ramesh Pathania / Mint

New Delhi: Japanese electronics firms are overhauling operations in India and introducing more products to take on their dominant South Korean rivals.

Delayed launches, high pricing and a narrow product range have left Japanese firms lagging in the Indian market for years.

Eyeing profits: A Sony showroom in New Delhi. Ramesh Pathania / Mint

Sony Corp., Panasonic Corp., Hitachi Home and Life Solutions (India) Ltd, Akai Sales Pte Ltd and Sharp India Pvt. Ltd are reworking prices, expanding the variety of products and boosting marketing to draw more customers.

“Indian consumers have become discerning. A Japanese brand tag alone does not work (in) India," said Giraj Sharma, who has worked with Mirc Electronics Ltd and LG Electronics India Pvt. Ltd and is now director of Behind TheMoon Consultants Pvt. Ltd, a Noida-based consultancy. “So the Japanese are waking up now and have begun to treat India as a mature market."

The balance is divided among Japanese brands and Indian firms such as Videocon Industries Ltd, Godrej Appliances, and Mirc Electronics, which owns the Onida brand.

Sony is developing a range of products for consumers not on its radar earlier, even if this dilutes its high-end tag. “We always focused on consumers with a household income of Rs5 lakh and above," said Sony India managing director Masaru Tamagawa. “But now, we have also started to look at consumers in the Rs2-5 lakh income group."

Rajesh Dewani, a Sony dealer in New Delhi, said this opens up room for growth. “The company has rolled out a series of 19-20 inch LCD (liquid crystal display) TVs only for India, starting at Rs15,000—something it never did in the past. Many more (cheaper) products are slated for launch this year," he said.

Sharp too is bringing a new range of products to India, such as microwaves and washing machines, but in the high-end segment. “The focus (now) is clearly to expand the product range and double the turnover to about Rs400 crore in the next year," said Kishalay Ray, general manager marketing, at Sharp.

Like Sharp, Akai is also bringing washing machines, DVD players and microwaves to India, said Pranay Dhabai, managing director of Global Brands Enterprise Pvt. Ltd, Akai’s exclusive licensee in India, Bangladesh, Nepal and Sri Lanka. Akai was marketed by Videocon till a few months ago but has made an independent entry since.

Another Japanese electronics firm Sanyo Corp.’s 50:50 joint venture with BPL Ltd, called Sanyo BPL India Pvt. Ltd, fell through last year. But Sanyo could be back in India as Panasonic is acquiring a controlling stake in the firm.

The deal is expected to close in March, after which Sanyo’s India operations would be integrated with Panasonic India, a company official said on condition of anonymity.

South Korean electronics firms aren’t perturbed by this renewed drive.

“We have not only believed in introducing contemporary technology but have also focused on strengthening our R&D (research and development) operations in the country," said R. Zutshi, deputy managing director, Samsung. “We have R&D centres in Delhi and Bangalore, with over 50% of employees in India being involved in R&D."

Industry experts don’t see the Japanese upstaging the South Koreans in India.

Suresh Khanna, former secretary general of Consumer Electronics and Appliances Manufacturers Association, said LG and Samsung have been successful because they invested massive sums in manufacturing, sales and distribution, unlike the Japanese firms. But he conceded Panasonic has now announced substantial investments in India.

Sharma of Behind The Moon said it is difficult to say if the Japanese firms are making the right moves. “The market (share) is likely to go up," he said, “but definitely not at the cost of the Korean giants."

vijaya.r@livemint.com

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Published: 09 Feb 2010, 01:15 AM IST
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