Sony India’s revenue declined in 2017-18 for the third year in a row.
Known for its camcorders, home theatre systems and Bravia range of television sets, Sony reported a 2.6 per cent drop in operating revenue to slightly below Rs 70 billion, from Rs 71.8 billion in 2016-17, shows data with the Registrar of Companies.
Sales peaked in 2014-15 at Rs 110 billion and then dropped to Rs 80.7 billion in 2015-16. It then fell 11 per cent the following year, amid a spin-off that separated its mobile handsets business into another subsidiary. A Sony India spokesperson said the shortfall in revenue during 2017-18 was due to a “conscious decision to focus primarily on the premium segment in the mobile phone category”.
“In all key categories that we exist in, namely, television, digital imaging, home and personal audio, Sony commands a leadership position in the market”, the person added.
Net profit, however, surged 35.5 per cent in FY18 to almost Rs 1.1 billion, up from Rs 793 million in FY17. Stock-in-trade and finished inventories from the previous year and a focus on pricier offerings helped its bottom line.
Sources say higher competition in India’s robust TV market had dented the firm’s share of late. Sony has grown increasingly dependent on its TV portfolio for revenue growth as demand for other products like camcorders, DVD players, digital cameras and personal computers remained subdued, with consumers shifting away from these categories. Television sets now contribute nearly 60 per cent to its total India sales; nearly 15 per cent comes from audio products. Another 15 per cent of sales come from digital imaging and the remaining 10 per cent from other products.
Several global players have entered the country’s smart-TV market, with attractively priced offerings. Sony’s 32-inch LED TV series starts at Rs 19,999 but those of Xiaomi, a new player, begins from Rs 13,999. TCL, Thomson, Kodak, and Vu have raised the heat with similar value for money offerings.
Sony India’s counter-strategy is in its premium portfolio, which it plans to leverage. Sunil Nayyar, managing director, recently said they were working to strengthen its premium category and expected a revenue share of 35 per cent from the segment in the next two years. Sony currently gets 25 to 35 per cent of its sales from premium products. “We continue investing in our premium segments and make it affordable by launching finance schemes,” he had said.
The company spokesperson said, “Sony is a premium brand in the country and we will continue to strengthen our premium brand position in the country. Overall, our profits have seen a positive growth owing to our premium focus in the country.”