“We plan to sell 3 mil­lion smart­phones in In­dia this year”

In a can­did in­ter­ac­tion with DQ Chan­nels, Pankaj Rana, Busi­ness Head, Mo­bil­ity Di­vi­sion, Pana­sonic In­dia high­light­ing their new tech­nol­ogy, chan­nel strate­gies and growth for In­dian Mar­ket.

DQ Channels - - Vendor Speak - ANKIT PARASHAR ankitp@cy­ber­me­dia.co.in

The con­sol­i­da­tion which is hap­pen­ing in the mar­ket, Is that af­fect­ing the hand­set busi­ness?

Con­sol­i­da­tion in a way is good. If you see over­all as a tele­com oper­a­tor side con­sol­i­da­tion is hap­pen­ing but user base is not shrink­ing. User base is in­creas­ing and mov­ing to­wards high tech­nolo­gies. Jio has up­graded users to 2G, 3G to 4G and other op­er­a­tors also work­ing on the VOLTE tech­nol­ogy. Voice and Data cost is rapidly go­ing down. So it’s good for brand like us and it’s a good sign for us.

As per Pana­sonic, what are the key de­vel­op­ments that you see in smart­phone side?

In Last 2 years, Chi­nese brands are dom­i­nat­ing in the In­dian mar­ket both the off­line and online mar­ket. They have re­ally built up the chan­nel as per as distribution net­work. This has given the ad­van­tage to a brand like Pana­sonic be­cause we are in many other prod­ucts like Re­frig­er­a­tor, TV, AC’s. So our distribution chan­nel is very strong and we are rid­ing on that chan­nel strength. This is giv­ing us the ad­van­tage and we are build­ing our distribution net­work in a big way now. We are ex­pand­ing our prod­ucts mo­bile phones to the tier 2 and tier 3 cities and other In­dian mar­ket.

Do you think when con­sumer come to brand spe­cific store, do they buy spe­cific prod­uct like mo­bile phone?

Mo­bile phone cus­tomer likes to visit the multi-brand out­lets be­cause they have dif­fer­ent choices and other pref­er­ences. But when cus­tomer is com­ing to Pana­sonic ex­clu­sive show­rooms and if they have some set pref­er­ences in their mind be­cause most of the cus­tomer who are com­ing to our ex­clu­sive stores, they have some brand loy­alty for Pana­sonic. Our brand show­rooms are help­ing us in a way to sell those mo­bile in those mar­ket.

What are the chal­lenges in terms of pric­ing you see in the mar­ket with other Chi­nese brands?

There are two types of brands. One is OPPO, VIVO and Gionee and they are sell­ing in the distribution chan­nel and their price seg­ment is very high be­tween 9k to 20k. Then there are the In­dian brands like Lava, Mi­cro­max, In­tex and Kar­bon hav­ing price seg­ment at en­try level be­tween 3k to 6k. 2 years be­fore, most of the sales started hap­pen­ing in the online space but af­ter en­try of these Chi­nese brands in the In­dian mar­ket, distribution sales has in­creased. Pana­sonic be­ing a pre­mium brand, we are into the seg­ment be­tween 6k to 15k and if you see over­all mar­ket space be­tween 6k-9k there is no such big com­pany and cus­tomer can buy In­dian only. Brand cus­tomer doesn’t pre­fer In­dian Brand so be­tween 6k-10 k, Pana­sonic is strong in the distribution space.

In the end of this March, Pana­sonic has an­nounced their ex­clu­sive prod­uct for online chan­nel. Same as Sam­sung, now we have two set of prod­ucts, one for only off­line/distribution chan­nel and one seg­ment only for online space be­cause online chan­nel is now con­tribut­ing 25-30% and for Pana­sonic, online sale has in­creas­ing ev­ery month.

How does Pana­sonic dif­fer­en­ti­ate it­self from other brands?

In the month of March when we an­nounced our new prod­ucts for online chan­nel and now we are launch­ing our new prod­uct port­fo­lio for off­line chan­nel also if you see our po­si­tion­ing is dif­fer­ent and unique for the mar­ket. If you see few brands are po­si­tion­ing their phones on the Cam­era, few on the bat­tery few are from the de­sign we are po­si­tion­ing our prod­uct on the in­tel­li­gent or in­no­va­tions. Our phones have the in­tel­li­gence fea­tures fo­cuses on giv­ing unique ex­pe­ri­ence to the end cus­tomers. In­tel­li­gence is the po­si­tion­ing which we are build­ing and you will see many in the month of July we are launch­ing 3-4 new prod­ucts in the In­dian mar­ket and those prod­ucts will be for the distribution chan­nel. Also we will launch 1-2 prod­ucts for online chan­nel in the month of July it­self.

How Pana­sonic phones are dif­fer­ently in­tel­li­gent from other phones?

When we say our phones are in­tel­li­gent phones or when we took this po­si­tion of In­tel­li­gence, We built a com­plete ecosys­tem of fea­tures. Our new fea­ture is called Arbo. It is a type of vir­tual as­sis­tant for the end cus­tomer. For ex­am­ple, if you are us­ing your smart phone, Arbo will un­der­stand your be­hav­ior or us­age pat­tern and it will keep giv­ing you those no­ti­fi­ca­tions at the reg­u­lar in­ter­vals that it is a time to do this. At this mo­ment no other player is pro­vid­ing this fea­ture at the end con­sumer level. Our fo­cus is how to pro­vide the bet­ter ex­pe­ri­ence to the end con­sumer in sim­plify man­ner.

What is the growth Pana­sonic is look­ing at for the In­dian Mar­ket?

Last year Pana­sonic sold 2 Mil­lion Smart­phones in In­dian mar­ket and this year we are tar­get­ing 3 Mil­lions smart­phones. Last year we were not fo­cus­ing on the online mar­ket which is con­tribut­ing 25-30% to the over­all in­dus­try. Now we are very fo­cused on the online space. At this mo­ment we have 4 ex­clu­sive prod­ucts for the online mar­ket which is giv­ing the vol­ume and value busi­ness for ev­ery month.

What is your chan­nel strat­egy?

We have changed our chan­nel strat­egy and we are re­vamp­ing our distribution chan­nel. We don’t have any Na­tional dis­trib­u­tor and we have also cut down the state dis­trib­u­tor ap­proach. We have di­vided In­dia into 24 states and in each of the state, we have our distribution part­ner for each of the dis­trict towns. For ex­am­ple in Haryana, there are 20 dis­trict towns, so we are ap­point­ing 20 distribution part­ners in each of the town and we are sup­ply­ing them di­rectly. By this we can un­der­stand and we can con­nect with the mar­ket in deeper way. At this mo­ment we have 175 distribution part­ners and by end of July our plan is to take it to 250 part­ners. By end of this July will cover 250 ma­jor dis­trict of the coun­try and then we will go fur­ther.

Also, we are build­ing our sales team ac­cord­ingly. Till last year we had few mem­bers in sales team but now in last two months we have hired around 200 peo­ple and an­other in two months we will be hir­ing an­other 100 peo­ple.

What are the schemes and in­cen­tives you are of­fer­ing to your cus­tomers?

Pana­sonic have three kinds of of­fer­ings for cus­tomers. First, we are giv­ing cus­tomers the unique of­fer with the lead­ing tel­com oper­a­tor. We have unique of­fer with Re­liance Jio, Voda­fone. Sec­ond, we have the credit fa­cil­ity as our all prod­ucts are be­tween 6k- 15k so we have the EMIs credit fa­cil­ity at the shop front for the end cus­tomers. Third, we have started giv­ing free ac­ces­sories like screen pro­tec­tor, back cover and flip cover at very rea­son­able price and few ac­ces­sories we are of­fer­ing free of cost.

How is you man­u­fac­tur­ing hap­pen­ing in In­dia?

We have our man­u­fac­tur­ing unit in Noida. Bixon tech­nol­ogy is our part­ner who pro­duces Pana­sonic TV’s, Wash­ing Ma­chines and few other prod­ucts. For Mo­bile, we have our man­u­fac­tur­ing unit in Noida that is Pad­get Tech­nolo­gies. They have 8 assem­bly lines and 4 pack­ag­ing lines with the ap­prox­i­mate pro­duc­tion ca­pac­i­ties 8 lakh smart­phones per month.

What is the ad­van­tage of hav­ing man­u­fac­tur­ing unit in In­dia?

Hav­ing lo­cal man­u­fac­tur­ing unit in In­dia is ben­e­fi­cial for us be­cause of the less man­u­fac­tur­ing cost but the ma­jor point is that we feel that we are very close to the cus­tomers and we un­der­stand the pain point of our cus­tomers where we can im­me­di­ately give the feed­back to the fac­tory to work on those points to im­prove.

What is your Mar­ket­ing strat­egy for this year?

We will be spend­ing 200Cr in mar­ket­ing ac­tiv­i­ties in a year. Mar­ket­ing ac­tiv­i­ties for Pana­sonic have di­vided into 2 ar­eas. First is distribution sales and an­other for the online sale. For Distribution con­cern, we would be go­ing with the print me­dia, TV ad­ver­tise­ment and out­door ac­tiv­i­ties at the shop front. For Online, we pre­fer the so­cial mar­ket­ing and dig­i­tal mar­ket­ing.

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