“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.
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.