- Sony India’s revenue declined in 2018-19 for the fourth year in a row
- Revenue from operations in 2018-19 fell by 8.3%
- Chinese brands like Xiaomi is giving tough competition to the brand
According to Sony India’s latest filings to the Registrar of Companies (R0C), revenue from operations in 2018-19 fell by 8.3% from a year ago to 6,417.52 crores. Sony’s sales peaked to 11,010 crores in 2014-15 but revenues started falling since FY16. Net profit from Indian markets dipped 5.9% last fiscal to 101.15 crores.
Sony India’s managing director Sunil Nayyar, however, attributed the steep decline in revenue to the global restructuring of the mobile phone business A few years ago, Sony took an exit from the laptop and, more specifically, a 32-inch television dip where, he said, performance didn’t meet expectations. The currency volatility and the shift in the basic customs duties also affected the company, he said.
Nayyar said Sony is now concentrated only on India’s premium-end and is the biggest brand in OLED and 4 K HDR televisions, high-end headphones like those with noise-canceling characteristics, party speakers, full-frame mirrorless cameras and lens sections. “We’re going solid in and bullish about our premium product portfolio,” he said.
Earlier, analysts predicted a tough year ahead for the company in India with Chinese brands like
and Xiaomi ready to enter the premium television segment. These brands are 30-40% cheaper than Sony, Samsung and LG.
Last year too, Sony reported a 2.6 percent drop in operating revenue to slightly below Rs 70 billion in 2017-18, from Rs 71.8 billion in 2016-17. Sales peaked in 2014-15 at Rs 110 billion and then dropped to Rs 80.7 billion in 2015-16. It then fell 11 percent the following year, amid a spin-off that separated its mobile handsets business into another subsidiary.
Sony is the third biggest television manufacturer in India, with Samsung leading the 22,000-crore Rs market. Xiaomi joined the segment last year, while brands such as TCL, Kodak and Thomson further reinforced their internet presence, which now accounts for 30% of total TV revenues.
Although the top three brands cut their rates to decrease the deficit, they did not match the rates in the 32-inchand43-inch entry-level section, which accounts for more than 70 percent of the total television market. Chinese and online-only products with Sony’s price distinction is the broadest because it retains a price premium over Samsung and LG.
Sony needs a new strategy in India to make a strong comeback and especially one that focuses on increasing revenue and not just reducing expenses. In the last few years, it had grown net profit by reducing expenses,” said Mohit Yadav, founder of business intelligence platform Veratech Intelligence.
“However, there is only so much cost deductions that can be made and the company is feeling the pinch now with a decline in net profit.”
An industry executive, however, claimed that Sony’s profit may have declined also due to higher cost associated with no-cost loans to consumers and drop in television prices to remain competitive.