Kolkata: Sony, Panasonic and Hitachi are among Japanese consumer electronics brands that have revitalised their Indian operations through strategies such as selling more profitable large-screen TVs, vacating low-margin entry segments, and avoiding price wars, led mostly by Chinese brands. Sales have been sluggish at Japanese firms over the past few years as Korean and Chinese brands gained ground.
Panasonic's consumer business division, which sells televisions and home appliances such as refrigerators and air-conditioners, has broken even in the first half of this fiscal year. The business had reported a net loss of ₹53 crore in 2023-24.
Sales, which were on a downward trajectory or flat for nearly over six years, grew over 30% in the fiscal first half. The company told ET that it is targeting sales of more than ₹3,000 crore in the consumer division, compared to ₹2,338 crore in FY24.
Sony India posted its best-ever net profit in the last eight years in FY24, which also saw the maker of Bravia televisions clock more than 20% growth in sales. The company had reported declining sales for six consecutive fiscal years, impacting profitability.In FY24, Sony India's sales were ₹7,663 crore, compared to a peak of ₹11,000 crore in 2014-15, while net profit was at ₹168 crore, showed the latest filings with the Registrar of Companies sourced from Tofler.
Panasonic India business chairman Manish Sharma said Japanese brands are not competing on pricing anymore, but they are now positioning themselves for lower total cost of ownership and value such as low maintenance cost and low failure rate. "At a time when the market is premiumising, it does help," he said.
The consumer electronics market in India has become extremely crowded in the last 5-7 years with intense price wars led by Chinese brands such as Xiaomi, Hisense, and Haier and online-focused brands such as Kodak and Thomson. This had even forced the Korean duo LG and Samsung to compete on prices.
Japanese air-conditioner manufacturer, Johnson Controls-Hitachi Air Conditioning India reversed a dip in sales and turned profitable in the first six months of this financial year. This was helped by a 64% year-on-year surge in sales to ₹1,392 crore. The business also raked in ₹6 crore net profit during the period compared to a net loss of ₹97 crore in the same period last fiscal. The business had plunged into losses in FY23 and FY24, while sales too had declined in FY24.
"Japanese electronic brands have reinforced their positioning in India as more premium," said Pulkit Baid, director at electronics retail chain Great Eastern Retail which runs around 100 stores. "They have also taken extreme cost caution by reducing branches and categories which were not making money," he said.
Sony India managing director Sunil Nayyar said income levels are rising in the middle and upper middle class in the country, driving demand for premium products.
He said Sony India has reinforced its premium positioning in the last few years. For instance, six years back, about 80% of Sony India's sales came from entry segment 32-43 inch televisions, which is now less than 20%.
Industry executives said Johnson Controls-Hitachi Air Conditioning achieved the turnaround by exiting the mass segment and increasing prices by 5% this fiscal. An email sent to the company remained unanswered. The Japanese parentage, however, will change soon - Bosch has recently announced to acquire Johnson Controls-Hitachi Air Conditioning globally.
