As Panasonic invades the white goods market, Channel News caught up with MD Steve Rust to see how its going.
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Panasonic is now a fully fledged white goods brand in OZ, flogging everything from bread makers, irons and rice cookers, to washing machines and 8 smart fridges.
“Demand has been great to date” says Steve Rust, Managing Director, Panasonic Australia, but “it’s early days.”
“We’ve sold out of inventory and there’s been good feedback from market” citing retailer Harvey Norman, whom Rust says is “selling well” on Pana’s new gear.
Panasonic now has over 50 white goods models on the Aussie market. One out of every two Pana products sold worldwide is now white goods and outsells its Audio Visual category .
And the giant hopes to repeat the trend locally.
So, what prompted the big change to irons and washing machines for a company best known for TVs and Blu-ray?
“We had an imbalance in the business… there was too much reliance on AV and CE business and as we know its a tough business to be in…with very rapid price erosion and no growth in the past 2 to 3 years,” says Rust.
This ‘imbalance’ forced Panasonic’s management team to take a “prudent” approach to the market at hand.
It now has three key pillars to its business in OZ – AV, Appliances and Communication solutions for business, which is also doing nicely.
Speaking of TVs, how’s that side of Pana’s business going?
“Demand hasn’t grown as such but its greater than expected, however, we can’t get enough TVs to sell,” Rust says, citing issues on the supply-side from Japan.
“We have to order three months in advance..but have more coming,” he adds. This supply issue was one AV specialist Len Wallis cited last week in an interview with CN, saying he was unable to meet the huge demand for Pana large screens.
“The market has settled this year and, its not as furious in terms of price erosion and demand for TV’s is sitting at around 3 million units per year,” says Rust.
Despite the entry into appliances, Panasonic is still “very strong” in AV, and the DVD recorder market is “good for us”, which may have been fuelled by the Olympics. Pana’s home theatre market is also “chugging along quite well.”
“The biggest issue in the AV market right now is the expanding amount of IP content and the seamless integration between IT and consumer electronics,” says Rust.
“The amount of IP content is expanding rapidly and is now provided in a way that is highly accessible to consumers.”
Streaming services such as Spotify, JB HiFi Now, QuickFlix and others means the days of downloading content from a PC or using just iTunes are well over.
On the appliance side, power consumtion is also becoming more and more important as electricity prices go up, but adds Pansonic’s Econavi power saving technology inbuilt into its appliances including washing machines deals with this issue very well.
Panasonic Australia also launched a slew of cameras last week – everything from a basic compact LX7 through to high end mirrorless cameras and Rust was “very pleased with the launch” and the response so far.
However, “there has been a general drop in demand for cameras due to the invasion of smartphones like iPhones, especially at the entry level.”
In addition, there is now more and more competition from online operators overseas as well as competition from the high end.
Online channels are “growing rapidly,” says Rust, adding its not just foreign e-tailers in play – there’s is a lot of competition locally between the likes of Appliances Online and JB Hi-Fi.
But it doesn’t mean the end of bricks and mortar just yet, and Rust says he is “confident they’ll always be room for the instore experience.”
“Some consumers love the convenience of online but there will always be plenty who want to go instore for the product experience – to get the look and feel, talk to the storeperson and so on.”
However, Panasonic’s MD questions the future success of international e-tailers, as issues like after-sales services issues come to the fore.
“There are some questions about service in Australia for a camera that bought, say, in the US,” and adds “consumers may not be comfortable buying international e-tailers in the future.”
“We are working with online partners including Appliances Online and are keeping an eye on other pure online retailers,” says Rust, adding Pana is being selective on choosing retail partners.
Afer sales service is an issue the brand is particularly concerned with and “we want consumers to have a good experience when they buy a product and ensure retailers have good return capabilities.”
However, he admits bricks and mortar retail in the future may be a bit different from today, and predicts there definitely more changes to come.