Sony, Panasonic sales fall again: Brand Japan loses ground to Chinese in battle of India

KOLKATA: Japanese brands Panasonic and Sony which ruled the global electronics market not long ago continued their slide in India last fiscal, on the face of increasing competition mainly from Chinese and online focused brands in smartphones and televisions.Panasonic India’s sales declined for the second consecutive year in FY19 while that of Sony India dropped for the fourth straight year, as per the latest regulatory disclosures to Registrar of Companies (RoC) sourced from business intelligence platform Veratech Intelligence.Industry watchers attribute it to their weakening brand pull among younger customers and premium pricing vis a vis Chinese rivals such as Xiaomi and TCL, particularly at a time when Indian consumers are cutting down on consumer spending. The Korean duo of LG and Samsung, which first ended the Japanese domination with more affordable products, have so far resisted the Chinese onslaught by dropping prices.“Chinese and Korean brands have managed to continually innovate and bring new offerings in price segments where there is massive consumption,” said Veratech Intelligence cofounder Mohit Yadav. “Japanese brands have primarily focused on premium segment and suffered a setback.”72357837 Panasonic’s revenue from operation dropped 10.5% year on year in FY19 to Rs 4,758.6 crore, while its net loss more than tripled to Rs 459.6 crore against Rs 131.8 crore in FY18. Sony’s sales fell 8.3% in FY19 to Rs 6,417.5 crore, and net profit dipped 5.9% at Rs 101.1 crore.Indian consumers value price more than product performance, which is a rub-off effect of the mobile phone industry, said Pulkit Baid, director at electronics retailer Great Eastern Retail. “Brands like Oppo, Vivo, Xiaomi and Realme took away the brand glamour from the mobile industry. It is now getting repeated in other categories,” he said. While Sony exited the mobile phone business in India this year, Panasonic significantly downsized it and now sells only a few smartphone models exclusively through ecommerce platforms.In televisions, too, the Japanese brands are struggling to compete with brands like Xiaomi, Thomson, Kodak and Vu in the sub-43 inches screen size segment that accounts for more than two-thirds of the Indian TV market by unit sales.Japanese brands including Panasonic, Hitachi and Daikin are performing better in categories such as refrigerators and airconditioners where competition from Chinese and online value brands is limited. Sony is growing its share in digital camera and audio product segments.A Panasonic India spokesperson said the company’s appliances business performed well in FY19 with refrigerators growing 74% even as the overall industry recorded a negative performance of 3%. “With respect to TV, the industry has seen a degrowth, hence we degrew but maintained market share.”The person listed rupee depreciation, capex investments and a drop in mobile phone sales as key factors for a fall in its profit last fiscal. Sony India did not respond to ET’s queries as of press time on Tuesday.The Korean players did much better. Samsung India grew sales by 19.7% in FY19 at Rs 73,086 crore, though its net profit took a beating due to intense price war. LG India’s revenue from operation fell by less than 1% to Rs 15,945 crore but the company expanded its profit. Most Chinese brands grew at double digit pace in India in FY19.

from Economic Times https://ift.tt/2YcG9RU