India among top 10 markets for us, not in top 5 yet, says Sennheiser

India is among the top 10 markets for Sennheiser. In an exclusive interview, ANDREAS SENNHEISER, chief executive officer of the over 80-year-old audio company Sennheiser, tells Sharleen D’Souza in Mumbai about how demand has changed after the pandemic and sees strong growth potential for the German audio equipment manufacturer in India. Edited excerpts:

How important is the Indian market for Sennheiser?
 

The Indian market is very important for multiple reasons. For Sennheiser, one reason is that it is one of the fastest developing and growing economies that I see. Given the strategic targets of India’s growth, gross domestic product, and other numbers, I think this is a very safe bet to be investing in India now on the ground with our company.

I see a lot of technology adoption here coming earlier, and the third reason, of course, is the sheer size of the market. There’s a lot of music in India, like weddings and a lot of film production. With the experience that we have and the competency, we can just add on to the ultimate experience.

Where does India stand in terms of revenue contribution?
 

India is among the top 10 markets for us but not among the top five yet. It’s just a couple of years away from entering the top five. But, of course, we have to sustain that growth pattern.

What is the investment you are making in India currently?
 

The main investment is in people here. And yes, that’s significantly higher in relative terms than in other parts of the world, just for comparison.

So we have our third-largest workforce on the ground here, just after the US and Germany, which means that we see the development potential here as much bigger than in many other areas.

We have over 50 people on the ground here, and we have had over 50 per cent annual growth over the past two years. If it continues, our staff base will continue to grow significantly. India has also seen a growth of more than 50 per cent over the past two years.

Across only three business divisions, which is the fastest-growing in India?
 

During the pandemic, all the studio gear was performing very well, including the brand Neumann and everything that could be used from home. Now, post-pandemic or even in the second half of the pandemic, many corporations, the government, and higher education facilities upgraded their audio gear. So the business communication side was the strongest growth driver.

And now, just post-pandemic, we see a strong, I would even say it’s an additional revenue source in the lifestyle sector because everyone wants to enjoy music again.

On the more stable demand side, I think that business communication is the one that will have the highest growth trajectory in the future. Also, India is growing at a faster pace than other markets globally.

What is the total investment you are making in manufacturing globally?
 

The most relevant number in terms of investment here is that we have about 10 per cent of our net sales invested in research and development, which is much higher than most high-technology companies. The reason is that we want to push the boundaries of what’s possible globally.

How is the Indian market accepting your product?
 

Over the past years, we’ve seen a strong shift from buying at the lowest possible price to buying the highest possible value, and that also defines competition. So, value for money is still important. But value comes with superior technology, great audio quality, and seamless integration.

There are a lot of other aspects of value that are non-financial. We’re happy to be able to provide the highest value for money, and this is appreciated by most of our customers.

Do you expect strong institutional orders to keep coming in from India?
 

One of the driving factors, which I find very positive, is the digital agenda of the government, which simplifies a lot of things and particularly allows remote working more seamlessly.