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The samurai class of warriors took shape in Japan after the Taika
reforms of 646 A.D., which also enforced military service on one in
every four Japanese adults. And the Japanese people have imbibed and
retained much of their fighting spirit as well as their preference for
honour above everything else till today.

So it¶s not at all surprising that Japanese products matched, and even bettered the world class
technology standards of the day in the 1970s and 80s. Even in the Indian market, Japanese
companies like Sony and Suzuki had the brand power and presence to conquer the market long
before the Koreans even planned an entry.

While Suzuki took the plunge early, brands like Sony and Panasonic were apparently not too
optimistic about the Indian market even till the early 1990s. Without volumes and with myriad
challenges of penetration, purchasing power and logistics, India was not a priority market. But
Korean brands LG and Samsung came, saw and conquered, since they were far more optimistic
of the market, and willing to get their boots dirty. That¶s why they dominate the Indian consumer
electronics market today; a market estimated to be worth around `32,000 crore.

To begin with, the Korean brands came to India after the government embraced liberalisation ,
which made setting up their operations relatively easier and less frustrating. By the time LG
knocked for the third time on Indian doors, the government had made the amendment that would
allow a foreign player to set up a 100% subsidiary in the country.

Secondly, home grown brands like Videocon, BPL and Onida were already facing internal
glitches. This created a largely vacant place in the market as the Indian brands were not geared
up to offer products with the changing times. For instance, the refrigerators sold by Godrej in the
1980s were also quite similar to the models sold by the company in the 1990s.

Thirdly the Japanese companies paid little or almost no attention to advertising, after sales
services and distribution, which proved to be one of the key reasons for their failure. Toshiba, for
instance, has operated in the laptops space in an association with HCL since the mid-1990s, but
had just one liaison office in India till 2001. They have also retained precious few service centres
in the country.

Various other factors like delayed launches, high pricing and a narrow product range left the
Japanese players with an unenviable position in the country, ruing over what could have been.
And the Koreans and the Chinese took advantage of the vacuum created in the market and made
their inroads. Interestingly, this is in stark contrast to other Asian markets where the Koreans
have not been able to make a dent into the market. In the markets of south east Asia, (particularly
Thailand) the Japanese brands still rule.

That¶s history now. Just as they say in cricket, when you slog ± slog hard as nothing comes out
of half-measures. Similarly the Japanese warriors are back on the war front again to improve
their position by leaps and bounds in the Indian market and make up for past blunders.

The Samurais have honed their fighting skills perfectly and are carefully adopting their
strategies. Starting with Akai India, the company has reinvented itself and is employing some
cautious aggression. Within just a few months of its revival in the country, it has already set up
200 service centres, changed its logo, is eying a turnover of `435 crore in the next 12 months and
is also planning to move into new verticals like telecom, IT products (laptops, Mass storage
devices) and power inverters. Pranay Dhabhai, Managing Director, Akai India talks on the
company¶s plans, ³We want to position ourselves as a mass premium brand this time. Thus we
have developed our entire product range accordingly and have even priced our products cheaper
by 5-8% compared to the leaders like Samsung and LG.´

Sony obviously needs no introduction, but the company is definitely

showing signs of emerging from its comfort zone. Without any qualms
in shedding off its premium tag, the company is busy developing
products for consumers with a household income of `2-5 lakh. This is an
antithesis to company¶s strategy of catering only to the niche premium
segment earlier. Sony has recently launched a series of 19-20 inch LCDs
at a knock out price of `15,000 (without using the Aiwa brand name).
Little wonder, that the company has been able to increase its market
share quite rapidly from 24.3% in January to 32% in May for the LCD category. Buoyed by its
success, the company has rolled up its sleeves to launch a slew of low priced products by the end
of this year. Tadato Kimura, General Manager, Marketing, Sony India explains the rationale,
³Japanese firms are getting more deeply involved and engaged in the Indian market than ever.
New-fangled marketing and distribution strategies are being taken up to achieve newly set
targets.´

Panasonic is following a similar trail. The company has been in the consolidation phase since last
year and has been aggressively building up its brand. Manish Sharma, Director Marketing,
Panasonic India exclaims, ³Panasonic was always known as a brand among Indian consumers.
But somewhere it got lost in between. But today, the recall of our brand & positioning has
witnessed an improvement, which is also reflected through increasing market shares.´ The
company today has 11,000 employees and has clocked sales of `2,200 crore in FY 2009. Another
contender in the league ± Sharp is all set to roll out a new range of products including
microwaves and washing machines in the high-end segment. The company is also focusing on
doubling its turnover to `400 crore in the next year.

The consumer durable industry in the country is expected to reach upto `35,000 crore by 2010
wherein every segment has a buoyant demand. Another factor stimulating the high hopes of the
Samurai clan is the capacity utilization of consumer electronics companies in India. As per a
latest report by FICCI, the capacity utilisation in this sector stands at around 70-75% and is
expected to further escalate by 10-25% in the next six months. However most of the Japanese
companies currently import their products from their parent companies across the world and
assemble them in India through third party contracts. But now they are gearing up to set up their
own production facilities here.

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According to analysts, the Japanese players¶ strategy can be perhaps linked to the good ol¶
saying ± once bitten, twice shy. This time the companies have graciously accepted the market
dominance and marketing techniques of the Koreans and set realistic targets for themselves.
They are not tackling their rivals head-on, but are adopting a watchful and cautious approach.
Japanese companies have always been better equipped on the technological front and Koreans
have been masters of aggressive marketing tactics. But this time, Japanese players are are
meticulously growing their dealer networks and marketing spends.

But this all is not a cakewalk. The route towards conquest would not be easy for the Japanese as
the Koreans have already sensed the threat to them. They, too, have slashed prices, launched
newer models and are advertising heavily. Japanese players have to deal with the initial
perception hiccups among consumers as well as dealers. As Pranay admits reluctantly, ³When
we approached some of the old distributors of Akai they felt that they could fetch huge margins
from us as we were desperate. But we decided to show our patience´.

Then there is also the challenge from Chinese, European and American brands. Companies like
Whirlpool, Phillips and Haier are also quite bullish on Indian market and are constantly
strengthening their foothold on the market. Moreover now the Japanese brands have decided to
stick to the mass segment where the competition is the hardest. Aggressive pull and push
strategies haven¶t been their traditional strength, and players at this end of the market are masters
of the same. They have to move up the learning curve pretty fast, for time isn¶t on their side
either.