Sony India has decided to step away from a pricing war with Chinese and online brands in the Indian market and bucking the trend, the Japanese consumer electronics giant wants to grow profit in India instead of chasing volume, managing director Sunil Nayyar said.
However, the company has dropped prices of entry level TV models by 7-8% to stem any further market erosion in the sub-40 inch segment where Chinese and online brands like Xiaomi, TCL, Vu and Thomson have made rapid gains.
Despite the price drop, Nayyar said Sony still maintains 25-35% price premium over competition to remain profitable.
However, Sony will not drop prices in large-screen TV and others to achieve value leadership. Nayyar said last fiscal Sony became leader by value in premium categories; 40% share in 55-inches and above televisions, 50% in noise cancellation headphones and full frame mirrorless cameras.
It has also deepened ‘made in India’ by increasing local production of TV from 50% last year to 95% now and plans to expand local production to other categories, said Nayyar, who just completed a year as the first Indian to lead Sony’s local operation.
India is the fourth-largest market for Sony globally.
“Our focus will be to grow the 4K television market and educate customers how Sony is different from the Chinese or online brands and why we have premium pricing,” said Nayyar.
Sony’s selling pitch is that there is more to a TV than the television panel as focused by the value brands.
“The panel is like a raw chicken. So, a Sony TV will be like a five star chef cooking a dish as compared to a roadside shop,” said Nayyar. Sony grew in 55-inch and above television sales by 90% last fiscal.
“This year we want to sustain similar growth. Yes, in 2K television we have faced the heat but with the pricing correction, we expect to do better.
Despite this, our overall TV business grew upwards of 15%,” he said.
Sony is the first large brand to acknowledge loss in sales due to Chinese brands in electronics.
The Rs 22,000-crore Indian TV market has moved to the value brands in the 32-inch segment, which is the largest, accounting for 60% of the market by volume and 45% by value. Samsung recently launched a specific series for online by dropping prices across sizes. Nayyar said Sony will not have any exclusive series or strategy for online.
Earlier this month, Xiaomi tweeted that it had a dominant 33.5% share in the Indian smart TV market in October-December 2018 quarter quoting figures from tracker IDC, while LG had 16.7%, Sony 14.8% and Samsung 13.3% share.
Nayyar said Sony has also been able to reduce dependence on TV business whose contribution has dropped from 80% two years back to 65% last fiscal. Businesses which have grown in revenue include cameras and audio products like sound bars and speakers whose contribution to totals sales doubled to 10% and 15% respectively.―Gadgets Now