“Our initiatives are well-aligned with the government’s Make in India policy” March 2018 issue

“Our initiatives are well-aligned with the government’s Make in India policy”

Daizo Ito, President, Panasonic India | India is not anymore a part of Panasonic’s emerging market business but has been carved out as the number one priority market globally. In an exclusive interaction with The Dollar Business, Daizo Ito, President, Panasonic India explains the rationale behind his company’s decision to make India a strategic hub and reveals how Panasonic plans to move ahead in the country Interview by Vanita Peter D’souza | The Dollar Business Daizo Ito, President, Panasonic India   TDB: From being at the top, then sinking into oblivion, and now trying to make a comeback, Panasonic’s performance in India has been quite enigmatic. Tell us how you see Panasonic’s journey in India so far. Daizo Ito (DI): Panasonic commenced operations in India in the year 1972 and since then the company has seen tremendous growth, owing to the support of our Indian consumers. Over the last several years, the company has braced itself for all kinds of competition in India, from domestic players to Korean and Chinese brands, and the brand has been able to craft a significant market share in many product categories. We understand the importance of adapting to consumer and market demographics, and hence localisation or Indovation, which means India-specific-innovation, has been our core business philosophy in the Indian market. TDB: What kind of role do you think the yen’s weakness has played in the revival of Japanese brands in general and Panasonic in particular? DI: The Japanese market is making an upward journey with increased possibility of exports and a surge in foreign exchange, which has boosted the Japanese economy. The phenomenon has also led to a rise in purchase of consumer goods from abroad and the local economy getting a boost from the same. TDB: What is Panasonic’s market share in segments that it operates in India? DI: The most popular product segments for Panasonic India include televisions, air conditioners and mobile phones. In air conditioners, we are at 10% (amongst top 3) and are looking at 12% by 2015. In LED TVs our current market share is 9% (4th in the segment) and are looking at 12% by 2015. When it comes to smartphones, we are looking at a market share of 5% by 2015.
Workers at the air conditioner production-TDB Workers at the air conditioner production line at Panasonic India’s state-of-the-art manufacturing facility at Jhajjar in Haryana
  TDB: The last name that comes to one’s mind when one talks about mobile phones is Panasonic. How realistic do you think are your plans regarding India’s mobile phone market? DI: Indian smartphone market is growing at a rapid pace and is a very important market for Panasonic. This is the reason why India is also the headquarters for the phone business for Panasonic. Panasonic sees a huge opportunity in the Indian smartphone space for companies that want to offer quality products at right prices. We are completely focused towards strengthening our smartphone portfolio in the country and plan to keep launching newer and better devices across price points, including feature phones, to appeal to a larger audience.  
"We have always believed in partnering with companies that know the Indian market well"
  TDB: From being one of India’s top five trading partners till the late 1990s, Japan doesn’t figure even among the top 15 partners today. What do you think is the reason for this decline? DI: Both India and Japan are working hard towards building a mutually beneficial business relationship. In fact, Indian Prime Minister recently concluded his successful five-day visit to Japan. The visit resulted in a promising investment of $35 billion in India over the next five years for developmental projects, as the two sides agreed to take their strategic relationship to a new level. Panasonic’s initiatives are in sync with these development plans. We have been working hard to contribute to the success of this decades-old strategic alliance between the two nations. TDB: Panasonic recently signed a joint venture (JV) agreement with Minda Industries to manufacture automotive batteries in India. Are JVs the way forward for Panasonic in India? DI: We have always believed in partnering with companies that are familiar with the intricacies of the Indian market besides offering premium products with better performance and all-round support. And the JV with Minda Industries in just another step in this direction. TDB: India is now trying to enhance its manufacturing capabilities with programmes like ‘Make in India’. Do you have plans to move more of your manufacturing to India and benefit from such programmes? DI: Panasonic’s decision of making India a strategic hub for the India, South Asia and MENA (Middle East and North Africa) region and its initiatives to maximise localisation are well-aligned with the new government’s ‘Make in India’ policy that encourages multinationals to manufacture in India. As an industry member we will make sure that whatever gets made in India is the best product globally, with sustainable manufacturing processes and at competitive costs. In fact, Panasonic has already strengthened its roots in India by establishing a Technopark at Jhajjar Model Economic Township (MET) in Haryana. Not only is the factory a testimony to Panasonic’s manufacturing prowess, but it also showcases India’s growing importance in our global plans. India is at the epicenter of innovation with the right mix of young, skilled, enthusiastic workforce and an excellent quality of work. Panasonic has already invested about $200 million in its Jhajjar plant, which caters to customer needs across categories.  
"Panasonic has and will continue launching new products that suit Indian requirements"
  TDB: What is the rationale behind Panasonic Appliances’ move to delist its shares from Indian stock exchanges? DI: India is not anymore a part of our emerging market business but has been carved out as the number one priority market globally. This makes it absolutely imperative that Panasonic increases its shareholding in its subsidiaries and group companies in the country. The move provides us with increased operational flexibility and will help us better serve our customers. TDB: You have been at the helm of Indian affairs for more than five years now. How different are Indian consumers from those elsewhere? DI: An expanding middle class, rising incomes with high purchasing power, young population and rapid urbanisation are some of the key factors which have led to a surge in India’s consumption story thereby accentuating India’s consumer electronics industry. These elements have led the consumer electronics industry to witness some new trends. While the number of product categories per household remains stable, several consumers are narrowing down their technology interest to devices that have multiple functions. In fact, the increasing capabilities and rapid adoption of mobile, multi-function devices are fueling continued consumer influence and control over devices and applications used in the workplace. Not only are consumers using these devices for work purposes, but they are also finding productivity improvements in doing so. Further, with the rising cost of fuel and power, the number of people and households using energy efficient products has risen sharply in recent years, particularly in metros. This provides an opportunity for businesses that are using “eco-friendly” as a component of their value proposition. Although Indian consumers are evolving, it is still a challenge for a brand to communicate its value over price as the majority of consumers get influenced by pricing over quality. To counter this challenge, Panasonic, in recent times, has begun plugging the price gap without compromising on quality aspect. We are overhauling our retail strategies, unleashing new products in different categories and stepping up advertising and marketing spends, and will continue to meet the expectations of a varied class of customers across Indian market. TDB: What are Panasonic’s strategic plans for India? DI: We want to conduct all business activities under the broad umbrella of ‘Smart Solutions’ and create value for our customers, thereby becoming the most trusted brand with responsibility towards the society. To achieve this goal we have been creating new categories, both in B2B and B2C business segments. We are also pursuing an autonomous management system under four broad categories including product planning & development, quality assurance, partnerships & alliances for business development, and new business incubation. Panasonic has and will continue entering new businesses and launching new products that suit Indian requirements.