Through the frosted glasses in Daizo Ito’s swanky office in Gurgaon, one can clearly see the growth and chaos bustling in and around Gurgaon. But an unconcerned Ito is focused on only one thing: how to convert the Japanese behemoth’s missed chance in India into an opportunity to make Panasonic a trusted household name in the country.
The thrilling World Baseball Classic (WBC) finals held at Los Angeles’ Dodger Stadium earlier this year saw Japan and Korea slug it out for the title, with underdog Japan winning the championship on the back of the team’s super pitching form. Some commentators believe that the photo finish WBC event irrevocably established that baseball was no longer just an American game. But for some others like Daizo Ito, Panasonic India’s Chief Executive, it signified much more than that viz. the curious case of the Indian consumer durables market where Koreans monopolise the segment at the cost of global Japanese heavyweights like Panasonic. Japan beat favourites Korea in the WBC finals, and Ito now has a plan, if not to beat, then at least, join the ranks of the Korean biggies in India’s Rs.26,000-crore durables market.
“We are no longer pussy cats, but hungry tigers,” Ito avers, with a roar, his towering personality almost dwarfing his swank cabin in Panasonic India’s premises at Gurgaon. For those who came in late, Panasonic was one of the first consumer durable companies to have spotted the India opportunity way back in the 90s, much before LG and Samsung soared into the limelight. In Ito’s own words, when he was sent by Chairman Nakamura to take charge of Panasonic’s India operations 18 months ago, he was “shocked” to see Panasonic languishing near the bottom, at 16th position in brand awareness among all its rivals. “In most other Asian countries, we are at the number 1 or 2 positions competing with either Sony or Samsung,” he laments.
Not that the big guys at the company headquarters in Japan were caught napping. Instead, all these years, Panasonic had been merely looking at China as their big growth engine. With the result that today, China contributes almost 8% to Panasonic’s global turnover; while India’s share stands at an embarrassing less than 1% of the behemoth’s global revenues. Ito however is in town to challenge status quo. Reputed somewhat as a turnaround man within Panasonic, the man has, to his credit, turned around the fortunes of Panasonic UK and has also taken his company to the number one position in Thailand over the last few years. Now his eyes are fixed on India. “Panasonic’s 100th anniversary is in 2018 and my gift to our headquarters on that occasion will be to make Panasonic India a stark success,” he avers smilingly. Ito has already got off to a good start. The last year has seen Panasonic jump from relative obscurity to right under the floodlights, courtesy a big budget marketing blitz with a host of ambassadors, including the new heartthrob Ranbir Kapoor and even the Bachchan father-son duo for their ECO initiative.
Sabiha Kidwai, General Manager (Marketing), Panasonic India has particularly huge hopes from Panasonic’s ECO range of environmentally friendly products, which are backed with a big budget media plan. “Our rivals also have energy saving models in their line up, but at Panasonic we are going a step further by sharing eco awareness with consumers,” says Sabiha, referring to Panasonic’s celeb laced campaign – ‘I’m doing my bit. How about you?’
The ambition within Panasonic’s Gurgaon headquarters is to double the company’s revenues from Rs.2,200 crore in the last fiscal and the marketing team says that plans are on track to achieve the doubling of turnover by March 2011. Explains Ito, “Despite slowdown, we have grown 200% over 2009 so far,” adding that the company hopes to finish FY10 with a robust 270% growth. The efforts by Ito and his core team are by no means restricted to just advertising communication. The change is reflected simultaneously in the company’s product, pricing and distribution strategies. At the product level, for starters, Panasonic has now begun designing its products within the country (as opposed to importing made in US or Japan products) to leverage on the unique requirements of the Indian consumers. By 2011, there is also a huge investment planned for setting up a production facility within India for ACs, plasmas/ LCDs and refrigerators. Of the $300 million set aside for the Indian market, about $100 million will go into setting up of the proposed plant. Not surprising, given that going purely by sales, Plasmas/ LCDs and air conditioners are the fastest growing product lines at Panasonic India these days. Also on the cards is an extension of Panasonic’s existing PDA technology into India to take advantage of the 3G regime, a move that would once again propel Panasonic in the lucrative Indian handset market (from which it had exited in 2006 after it failed to woo customers) where its biggest rivals LG and Samsung already boast a big presence.
Pricing is the next frontier that Panasonic hopes to conquer successfully. “There is an ongoing debate in the Indian market as to when LCDs will become a commodity as has happened with CRTs. We have already started commoditising the LCD with our 2009 festival offer of a 32 inches LCD at Rs.29,990 only,” continues Sabiha. In fact, next in their line up – to be launched early next year – are the Volume Zone products in every category, which will entail giving the Indian consumer better quality at lower prices.
Distribution however is one area where success still eludes. After all, in a cut throat competitive market where rivals LG and Samsung are virtually falling over each other to buttress their mostly common dealer network, distribution is certainly a tough nut for Panasonic. But undeterred, this Buddhist from Japan is counting on his 3Ps of product, positioning and people to deliver the goods. “Panasonic India is limited compared to our global operations, which makes even small components. Now that the Panasonic management has renewed its commitment to the Indian market, my dream is to get our global range to consumers here,” he says, signing off. After UK and Japan, will this turnaround man manage to give a new lease of life to Panasonic in India? We don’t know yet, but wish him luck anyway!
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