Japanese electronics giant Sony has been in India for more than two decades. But it was only this year that Sony India appointed its first Indian managing director. Sunil Nayyar, 49, is betting on rising disposable incomes and improved macroeconomic climate in the country to drive Sony’s growth in India, which is one of the company’s top five markets in the world. Nayyar told Fortune India in an interview that Sony India is ramping up its premium range across categories and expects these products to account for around 30-35% of revenues in the next couple of years, up from 20-25% now. Edited excerpts:
You are the first Indian to head Sony India since it entered the country in 1994. What message does Sony want to send with you coming in?
Firstly, an Indian coming to India to head Sony obviously means better connect with the customers, better understanding of the Indian psyche, and better communication with trade partners. I believe people should relate because India is a country where not only professional business sense, but also things like emotional connect work. Two reasons are: I have already worked here so I understand the system and know most of the people whether it’s the channel partners or it’s my own people here in Sony India. Also, being an Indian, I understand the business climate and I should be able to relate well to my people.
How different do you expect your approach to be?
I don’t think it will be much different. Sony has been on course to develop in this market and to create business, and over a period of time we have evolved to develop a premium image in this market. Therefore, I will continue to strengthen this kind of an image with more vigour and force because I believe that we can still build on the brand Sony and give the true value to our consumers.
How is the Indian market different from others for Sony?
For Sony, India is among the top five countries in contribution to global sales. We have come a long way. I still remember we were not even in the top 10 about 10 years ago. So in that sense it is an important market for Sony Corporation, considering India is the youngest country (in terms of population) in the world and has the highest growth rate. Therefore, our parent company is excited, so they would like to invest... plans are ongoing, and as I said, we will invest most of our resources in solidifying Sony’s premium image in this country, while continuously launching state-of-the-art premium products.
Will television and imaging be your key segments in India?
Undoubtedly, television will be our key segment because it has remained a pillar for us for a long time, it still does and it will, because it contributes to more than half of our business. It doesn’t mean that only television will be the story from Sony’s side. We are making big inroads into digital imaging. And now with customers gladly accepting the mirrorless technology which Sony started, we significantly increased the share of the full-frame business to 25% in the first quarter of 2017-18, from 10% a year ago.
But in recent years, the TV segment has seen fierce competition. In the premium space, it is the South Koreans, and in the mass market Chinese companies have cornered the market. How are you planning to maintain market share?
In the real sense, we did not lose market share in value terms. Quantity-wise maybe, because we don’t chase volumes in the marketplace, especially when it comes to those price brackets which we don’t want to enter. Sony always has been kind of a premium brand and there is a brand value that customers associate with it and are willing to pay a price. So, I am not at all moved by those kinds of price wars in the marketplace because India is a huge market. It’s a pyramid so there is a place for everyone. In the premium segment, yes, the competition is healthy but as I said, our sales are significantly better. We are leading today but we would like to strengthen this more. Sony has always been a brand synonymous with premium quality and that is reflected across our product categories. Our premium products across categories, such as BRAVIA television, personal and home audio and digital imaging, together contribute 20-25% to the revenues at this moment. We expect it to rise to 30-35% in the next couple of years.
Despite your imaging and multimedia strengths, why don’t we see too many Sony mobile phones in the country?
Mobile phone is a highly competitive market. I would say it’s a more price-sensitive market than televisions. We don’t have the strength when it comes to mass volumes. Hence, we continue launching our flagship products in mobile phones.
In the past few years, Sony has seen pressure on revenue in India. How are you planning to turn it around?
I won’t comment [on] whether it underperformed. A lot of changes have happened in this country in the past couple of years—a new government was formed, new policies were there, and hence, things were changing and customers were also adjusting. Largely it has to do with some kind of demand phenomena for not achieving the expected growth levels. For example, the situation is completely different now from what it was when I came here. [When] I came eight-nine months earlier, the mood of the country was slightly different, but now things are shaping up in a different way—macroeconomic indicators are looking very positive, and everybody is talking growth in this country.
Has the falling rupee impacted any of your segments?
I don’t think so. We still intend to keep up our price points and hope the rupee becomes more stable. For now, I think, we should be able to handle this kind of situation. But if it decreases further, then we will evaluate our options.
(The story was originally published in the October 2018 issue of the magazine)