Consumer electronics major Panasonic has put in place a multi-pronged strategy to draw consumers impacted by the slowdown. The plan, which Mr Manish Sharma, the 40-year-old Managing Director of the company, has laid out is this: Enter new product categories and launch India-suitable products, drive growth in the tier-II towns, enhance retail footprint, and drive sales through “affordable” pricing and also by providing easy loans to consumers.
In an interview to Business Line , Mr Sharma says the short-term consumer sentiment doesn’t look good. “Though we grew 72 per cent during the first quarter ended June, we would have grown more had the situation been better,” he explains.
Product range
Elaborating on his strategy, he says that Panasonic will expand its product range in its existing categories. For example, it will bring in online water purifiers to the Indian market to start with. Water purifiers have a huge market potential here, he says. As of now, according to him, the market size is seven lakh units a month (the online/running water segment alone), and it is growing at 20-25 per cent. “The offline market is even bigger, however, we do not aim at that.”
Besides, Panasonic plans to launch what he calls ‘affordable’ products. He cited the example of its new flat panel range targeted at the tier-II and tier-III market. He said these TVs have only one USB port as the consumer there may not plug in more than one gadget at a time, and “we passed on the cost advantage to the consumer”. He also noted how the company managed to grow its air-conditioner business last year by over 100 per cent. “Our Qube AC (a split AC developed for India) alone drove overall AC sales for us by 20 per cent.”
Cost pressures
He says though in the last two years cost pressures have forced companies across verticals to increase prices, Panasonic would probably be the only brand that actually increased the price the least. “During the period, we would have increased prices thrice and to the tune of 12-13 per cent. The overall rupee impact itself is very huge. We try and absorb various costs within the system by doing a lot of value engineering,” Mr Sharma said. However, he warned, saying, “Any further deterioration in the rupee happens, we may have to increase the prices again.”
It has also tied up with Bajaj Finance and Shriram Finance to offer ‘interest free’ loans to consumers. The interest part is borne by Panasonic, he said. With these plans in place, Panasonic looks to double its ‘consumer product division’ business to Rs 5,000 crore during the current year.