When we look at the history of consumer electronics, it has witnessed periods of domination from different geographies. First it was american and european. then it was followed by the japanese era. after a disastrous devastation in world war 2, the latter years of the past century were memorable for the land of the rising sun. just as in the automotive industry, the made in japan brand name stood for excellence and nothing less in the consumer electronics sector. but the korean wave was devastating, and took the japanese quite by surprise, particularly in the indian market. even as brands like samsung and lg strengthen their leadership positions in the country, a new chinese wave is gaining ground, which has compelled the koreans to move towards more premium positioning (blue ocean strategy). however, in the midst of these developments, we could witness a blast from the past, for the japanese are back! And this time, they are looking for the volume game, based on aggressive pricing. but can they win in a mode of warfare that is not their trademark strength? Neha Saraiya of 4Ps B&M takes a closer look...
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.

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Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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