Thirty years later, Sony India on track to hit $1 billion revenue milestone

NEW DELHI: Sony India, the local unit of Japan’s Sony Corp and one of the country’s oldest and best-known global technology brands, is on track to top $1 billion in annual revenue from its consumer electronics business this fiscal company officials said.

Sony India managing director Sunil Nayyar told Mint that Sony’s efforts to diversify its revenue sources beyond televisions, coupled with growing demand for expensive premium products, is helping the company in the segment. Reached new revenue milestone 30 years after registration in China. In an exclusive interview, he highlighted the Delhi-based company’s post-pandemic recovery.

Steady revenue growth

“Our revenue has grown steadily over 20% year-over-year over the past two fiscal years. This trend has been driven by a more streamlined TV portfolio since the end of the pandemic, while audio products, imaging and gaming are now the dominant players in the consumer electronics space. Strong growth area. With this trend, we now expect Sony India’s annual revenue to cross $1 billion for the first time and position the region to become one of the top three regions in the world,” said Nayyar.

Sony India’s sales in FY24 were $Nayyar said the company is preparing to submit its latest financial data to the Registrar of Companies as soon as possible, with an investment of 76.64 billion rupees, or about $900 million.

To be sure, Sony India Private Limited does not include Sony’s film and entertainment businesses, which operate as Sony Pictures Television and Sony Music Group, nor does it include its engineering development arm, which operates as Sony India Software Center. For the Japanese conglomerate’s core business, Sony India sells televisions as its main source of revenue and operates as a consumer electronics brand.

“We are primarily driven by TVs, which are our flagship products and we are the top brand in terms of TV market share with 50-inch and above screen sizes. However, three years ago we were almost 80% dependent on TVs; today, we are About 55-60% of Sony’s revenue in India comes from television,” Nayyar said.

Nayyar, however, claimed that the decline in TV’s contribution to Sony India’s revenue was not due to lower TV sales.

“We have cleaned up our product portfolio and we are no longer selling TVs in the budget range and small screen sizes. With premium brand recognition, while we technically still have TVs in this screen size and market, we do not There is no competition with counterparts in China or South Korea,” he said.

Instead, over the past two fiscal years and the current one, Nayyar has focused on selling more premium TVs, whose markets are expanding and generating greater revenue and profits. Last year, the company benefited from this strategy—Nayyar said it gained $Net profit was 2.25 billion rupees, with a profit margin of just over 3%. The current low profit margins are the result of heavy investment in marketing campaigns to boost sales.

“This has encouraged us to invest aggressively in the Indian market and we are investing with brand ambassadors in the TV and imaging businesses,” he said.

“Our billion-dollar target is based on a more diversified presence in the Indian consumer electronics market. Currently, television accounts for 55-60% of our annual revenue, while digital imaging for full-frame and professional mirrorless cameras contributes to our annual revenue 15-20% of our annual revenue. Currently, audio products contribute 10-15% of our annual revenue, while the gaming industry has been recovering, PlayStation 5 console now contributes 10-12% of our annual revenue in India, “Nayyar said.

The company, which celebrates its 30th anniversary in India this month, continues to maintain its brand memory and familiarity with consumers, analysts and retailers said.

“The Sony brand continues to retain familiarity with buyers, especially in the TV space – although it has largely exited the large-scale budget category, it remains one of the top four brands in the category. While it may not have Apple’s halo , but people recognize that it is a brand with a long history, even though the TV market has recovered and been captured by China’s Xiaomi, followed by Samsung and LG from South Korea,” said Navkendar Singh, vice president. -President of Indian market research company International Data Corporation (IDC).

IDC India smart TV market data on July 18 shows that Sony ranks fourth in the overall market, behind Samsung, LG and Xiaomi. However, in the first two months of this fiscal year, Sony’s TV sales exceeded the industry average growth – 1.8 million smart TVs were sold in April and May this year, an annual growth rate of 12.5%. Sony India’s TV sales There was also growth over the same period, with a year-on-year increase of 27%. As of May, Sony’s share of the Indian smart TV market was 9.6%, up from 6% at the end of 2021 three years ago.

Nayyar also stressed that Sony has no plans to re-enter the smartphone market, which it exited five years ago due to declining market share and increasing competition. “You can never say never, but so far there are no concrete plans to talk about,” he said.

IDC’s Singh added that Sony “may not have the kind of appetite for risk and aggression that any brand needs to survive in the Indian smartphone industry.”

“This makes it unlikely that Sony will consider re-entering, especially given how saturated the market is today,” Singer said.

Nonetheless, Sony India expects its focus on high-end devices to continue to pay dividends in the short term. “TVs are a key business driver for us and most of the buyers who buy our TVs are looking for us because of our technology and premium standards. Until sometime three to five years ago, we were trying to compete on price with other brands We’ve lost our way — that’s never worked out for us. Ultimately, we don’t want to get into a price war but deliver strong value with premium TV, which we expect to be, at least for the next two to three fiscal years. We will maintain double-digit growth,” Nayyar highlighted the company’s direction forward in India.