The company is looking at the television segment to drive revenues in India
The country's third largest consumer electronics company, Panasonic India is looking to clock revenues of Rs 12,300 crore in FY19 driven by the television segment. In an exclusive interaction with Moneycontrol, Manish Sharma, President, and CEO, Panasonic India talks about the business strategy and growth prospects.
Excerpts:
Q: You have entered the OLED television segment as also new 4K LED television models. Will this drive a majority of growth for the company in FY19?
A: We are looking to increase our market share in the television segment from 9 percent to about 12 percent. Here, we are looking at 25 percent of revenue from 4K range. In the 40 inch plus category, our market share is 12-14 percent which we are looking to increase to 15 percent. Further, in the 55-inch category, we are looking at a 20 percent market share from 12 percent.
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This is will be done by strengthening the high-technology products like 4K LED television and also by increasing the penetration of 32 and 40-inch television into smaller towns. The upcoming Diwali season is expected to be promising for us and help us drive 30 percent growth which is double than that of the industry growth.
Q: On an overall basis, what is the target for revenue for FY19? Which will be the segments that will lead the revenue generation?
A: We clocked about Rs 10,200 crore of revenue from the Indian market in FY18. We want it to touch Rs 12,300 crore in FY19 which means a 20 percent growth in revenues.
For us, the television segment will be the topmost revenue generator at about 17 percent. This is followed by Anchor Electricals which is the wiring devices business with about Rs 3,500 crore of revenue. This is followed by air-conditioners.
Q: You are looking to expand business from high-end televisions. However, goods and services tax (GST) for the television above 27 inches has been retained at 28 percent. What is your view?
A: I look at it as an opportunity lost. However, we will keep advocating a lower tax rate and are hoping that our voice will be heard. The GST reduction will not only help the industry expand but also help create new jobs due to rise in demand.
Q: Unlike your other markets globally, India has a higher share of B2C business. Will that see a change in the near future?
A: In India, 77 percent of our revenues come from the B2C space whereas the rest is B2B. In other markets, about 78 percent of revenues come from the B2B space. Our strategy is to increase the revenue contribution of the B2B segment in the next five years and have a 50-50 share between retail and corporate.
In the B2B space, we are focussing on display signages, security and surveillance products, cloud-based high-definition video conferencing. We introduced the India Innovation Centre last year to customise solutions for the Indian market. There will be an equal focus on B2B and B2C here.
Q: Is the strategy to Make in India?
A: If you look at our strategy, we have collaborated with several of the programmes of the Indian government. The thrust is not just to manufacture locally but also have Research and Development (R&D) capabilities and human resources to design products for the Indian market.
Q: There have been players who have been exiting the smartphone space in India. What are your plans in that segment?
A: Our strategy is to not to chase growth but to improve the consumer experience. In the near future innovation will be the key and we will launch new smartphones looking at the needs of the customers. But, we are not in the race of chasing market share.