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New Delhi: Sony India, the local arm of Japan’s Sony Corp and one of the oldest and most recognizable global technology brands in the country, is on track to achieve $1 billion in annual revenue from its consumer electronics business this fiscal year, a top company official said.
Efforts to diversify Sony’s revenue stream beyond television, coupled with a rising demand for expensive, premium products is helping the company reach a new revenue milestone exactly 30 years after it was registered in the country, Sunil Nayyar, managing director of Sony India, told Mint in an exclusive interview, as he underscored the Delhi-based firm’s post-pandemic resurgence.
Steady revenue growth
“Over the past two fiscals, we’ve seen a steady revenue growth of over 20% year-on-year. Since the end of the pandemic, this has been driven by focusing on a more streamlined portfolio of televisions, while audio products, imaging and gaming have come up as strong growth areas in the consumer electronics space right now. With this trend, we now expect to cross $1 billion in annual revenue for the first time as Sony India—and remain on track for this geography to become one of the world’s top three regions in terms of revenue,” Nayyar said.
Sony India’s sales in FY24 stood at ₹7,664 crore, or about $900 million, Nayyar said, as the company is preparing to soon file its latest financials with the Registrar of Companies.
To be sure, Sony India Private Ltd does not include Sony Corp’s motion picture and entertainment businesses that operate as Sony Pictures and Sony Music Group, or its engineering development division that operates as Sony India Software Centre. For the Japanese conglomerate’s core operations, Sony India sells television sets as its primary revenue driver, and operates as a consumer electronics brand.
“We were largely driven by televisions, which are our flagship offering and where we are the top brand by market share in televisions of 50-inch screens and above. However, from a dependency of nearly 80% on televisions up until three years ago, today we have around 55-60% of Sony’s India revenue being generated by televisions,” Nayyar said.
The fall in contribution of TVs to Sony’s India revenue, though, is not because TV sales have declined, Nayyar claimed.
“We’ve cleaned up our portfolio, wherein we no longer sell televisions at budget ranges and small-screen sizes. With a premium brand perception, while we still technically have TVs in this screen size and market, we’re not in competition with our counterparts from China or Korea,” he said.
Instead, over the past two fiscal years and the ongoing one, Nayyar has focused on selling more premium televisions, market for which is expanding, and generates greater revenue and margin. Last year, the company reaped benefits of this strategy—Nayyar said that it earned ₹225 crore in net profit, with a a margin of just over 3%. The current low margin is a result of significant spending on marketing initiatives to boost sales.
“This has encouraged us to invest actively in the India market, which we’re doing with brand ambassadors for our televisions and imaging businesses,” he said.
“Our billion-dollar target is based on a more diversified presence in India’s consumer electronics market. While TVs account for 55-60% of our annual revenue today, digital imaging with full-frame and professional mirrorless cameras account for 15-20% of our annual revenue. Audio products generate 10-15% of the annual revenue for us right now, while gaming has been a resurgent sector—the PlayStation 5 gaming console today generates 10-12% of our annual revenue in India,” Nayyar said.
The company, which completed three decades in India this month, has continued to retain its brand recall and familiarity among consumers, analysts and retailers said.
“The Sony brand continues to retain familiarity among buyers, especially in televisions—where it remains among the top-four brands in the category despite essentially withdrawing from the mass-scale budget category. While it may not quite have Apple’s halo, there is a recognition of it being a longstanding brand, even though the television market was revived and taken over by China’s Xiaomi—and Samsung and LG from Korea keeping pace,” said Navkendar Singh, associate vice-president at market researcher International Data Corporation (IDC) India.
IDC data on India’s smart TV market from 18 July said that in the overall market, Sony ranked fourth after Samsung, LG and Xiaomi. However, in the first two months of this fiscal year, Sony’s sales of TVs outpaced the average industry growth—while 1.8 million smart TVs were sold in April and May this year at an annual growth of 12.5%, Sony India saw its TV sales rise by 27% year-on-year during this period. As of May, Sony held a 9.6% share in India’s smart TVs market—up from 6% at the end of 2021, three years ago.
Nayyar also emphasized that Sony does not plan to re-enter the smartphone market—which it exited five years ago due to falling market share and rising competition. “You can never say never, but as of now there are no concrete plans that can be spoken about,” he said.
IDC’s Singh added that Sony “may not have the kind of risk and aggression appetite that any brand would need to survive in India’s smartphone industry.”
“That makes it unlikely for Sony to consider a re-entry, especially given how saturated the market is today,” Singh said.
Nevertheless, Sony India expects its focus on premium devices to continue to pay dividends in the near term. “Most buyers who look for our televisions, which are our key business drivers, look for us because of our technology and premium standards. Sometime until three to five years ago, we lost our way somewhere while trying to compete in the price war with our fellow brands—this never worked for us. In the end, we’re not looking to compete in a price war, and are instead delivering strong value with premium televisions. We expect the double-digit growth to remain with us for at least another two to three fiscals,” Nayyar said, underlining the way forward for the company in India.
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