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Localisation is key to success in India: Daizo Ito

Interview with President, Panasonic India

Ankita Rai 

Daizo Ito

In an earlier era, most foreign companies developed products for the US and the European markets and later brought them to India. It no longer works that way, Daizo Ito tells Ankita Rai

You have been spearheading Panasonic's India operations for the last seven years. How different is the Indian consumer from those you have encountered in other Asian markets?

India is one of the fastest growing economies in the world and has an exceptional market potential. India has undergone much more social and economic change in the last generation than any other country. Therefore, innovation holds the key to success here. India is a very diverse market and, therefore, it is hard to categorise the Indian buyer. Indian consumers are not only looking for the availability of products, they also want better experience, services and ambience. To succeed in this country, it becomes imperative for brands to innovate and make products keeping in mind the needs of the local people.

Panasonic focuses heavily on 'localisation' of products and technologies to suit the domestic requirements. Earlier, most foreign companies, including Panasonic, developed products for the US and European markets and later brought them to India. It no longer works that way.

What is the reason for your focus on the India, South Asia, Middle East and Africa (ISAMEA) region? Is there an effort to reduce dependence on the Japanese market and focus more on other geographies?

India has been playing a vital role in Panasonic's development globally over the past few years and is rapidly emerging as one of the strongest markets. We aim to make India a focal point of Panasonic's expansion plans and make it a manufacturing hub to start exporting to markets like West Asia and Africa.

The Indian economy has seen a radical shift over the last decade and is growing at a fast pace. With its strong manufacturing base and a robust services sector, it has become a great business destination. India has been carved out as the number one priority market globally for Panasonic as it is rapidly emerging as a growth leader for the entire Asia-Pacific region. With investments on products, talent, marketing and manufacturing, we aim to strategically leverage our expertise and resources in India for the benefit of other emerging markets.

With a new focus on developing and leading business operations in South Asia, Middle East and Africa, which are emerging markets for Panasonic, we will continue with our philosophy of empowering the local

Earlier you said you wanted to make Panasonic an Indian company in India rather than a Japanese company in India. Have you been able to achieve that?

Localisation has been a key factor in Panasonic's growth in India. The localisation strategy focuses on conceptualising and customising products for the Indian consumers keeping local needs and conditions in mind. We have also made crucial changes to the top here to drive growth from the country, build deeper inroads into emerging economies and swifter decision making.

The company has invested about Rs 1,309 crore in its Jhajjar (Haryana) plant, which caters to customer needs across categories. We are currently producing air conditioners, washing machines and welding systems at Panasonic Technopark, and plan to export the air conditioners and washing machines to the Middle East and Africa soon.

Panasonic acquired 80 per cent stake in Anchor Electricals in April 2007 and the remaining 20 per cent in September 2009 for which Rs 2,400 crore was invested. For the joint venture company with Uno Minda, we have invested Rs 100 crore.

We also started the mobile phone business in 2013 and are expanding the business by adding smart phones and feature phones in the product line-up. The company has started selling the mobile phones in Sri Lanka and will do so in the West Asia and Africa soon.

How has the company evolved in India over the years?

When we studied the Indian consumer's mind-set and the market we learnt that products that worked well in the international markets might not work for Indian consumers. For example, the USB port is used in a big way by Indians as opposed to other markets. Issues like infrastructure posed a challenge for the establishment here. There were difficulties on the manufacturing front coupled with inflation that we faced in the beginning. This is a key reason that Panasonic shifted focus to products specific to the domestic market.

The new government's focus on Make in India to encourage multi-national companies to manufacture in India is aligned with Panasonic's objective of making India a strategic hub for the ISAMEA region and presents an opportunity to maximise localisation. As an industry member, we will make sure that whatever gets made in India is the best product globally, with sustainable manufacturing processes, and at competitive costs.

What is your vision for the growth of the Panasonic brand in India? What would be the key focus areas for the company here on?

We are focused on providing smart solutions to create value for our customers. This includes creating new categories in the B2B and B2C business. For B2C, we will continue to create products that meet local needs. In B2B, we will expand solutions for businesses following our corporate strategy. We will continue to pursue an autonomous system here under four broad categories, including product planning and development, quality assurance, partnerships and alliances for business development and new business incubation.

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First Published: Mon, November 16 2015. 00:09 IST