Chennai: It's a seven-year itch for Sony India. Not having any joint venture partner, Sony India, the wholly owned subsidiary of Sony Corporation, Japan, is now changing its retail formats.
The change not only includes the introduction of a new retail format called Pro Shop but also upgrading, renaming and expanding existing formats. While Sony India sells directly to retailers located in the four metropolises and Bangalore, 20 distributors supply to multi-brand outlets located outside these five cities.
''Today shoppers look out for some unique shopping experience. Further, as the products attain more technical sophistication, it is more of technology selling that happens at the retail end than selling brands,'' says Sony India manager (channel strategy) Ravi Katial.
Pro Shop will retail exclusive lifestyle products like home theatre and car audios, spread across the nation. Katial says the change in customer behaviour over a period of time has necessitated this sectoral focus.
Pro Shop will join Sony India's retail structure that consists of multi-brand outlets, Sony Exclusive (exclusive dealers selling only colour television [CTV] and audio models) and Sony World, the mega store showcasing the company's entire product range.
''Pro Shop is just one part of our market expansion strategy,'' adds Katial. The other parts consist of upgrading the existing Sony Exclusive outlets and renaming them as Sony Zone, expanding the Sony World outlets and the web initiative.
Sony Zone, modelled along the lines of Sony World, will be small in size and located in upcountry markets. The company plans to increase such outlets to 500 from the existing 29. While it is a big leap with regards to the Sony Zone format, the company is also on its way to increase its franchisee-owned mega concept format, Sony World.
Given the wide range of products manufactured by Sony Corporation, small dealers found it difficult to stock and sell everything. However, the company was at a loss as it was not able to push its entire basket of products. This resulted in the Sony World concept, the one-stop shop for all Sony products.
Showcasing the entire range of Sony India's products, the centrally air-conditioned franchisee-owned Sony World is normally 3,000-4,000 sq ft in size, sporting a uniform interior layout and a lighting scheme to offer shoppers a unique shopping experience.
The other beneficial offshoot of Sony World is in holding the price level of Sony products in a city. The idea is to have one Sony World store in all the towns with a population of 10 lakh and above. ''By 2005 we will have 50 Sony World outlets, which in turn would contribute around Rs 300 crore to our turnover,'' says Katial.
Today 82 per cent of the company's Rs 670-crore turnover comes from multi-brand outlets, 7 per cent from Sony Zones and Sony Exclusives and 11 per cent from Sony Worlds.
Though the Sony World stores were expected to stock Sony India's entire product range, in practice it did not happen. Even today, at some shops, products of normal usage like floppy discs, micro tapes are not available.
Correcting this anomaly, all Sony World outlets will have an Internet-enabled computer to help shoppers to buy their requirements and also latest Sony products from Sony Singapore. ''Our website has been redesigned to facilitate Internet shopping,'' says Katial.
Sony India managing director Teruo Ishii says non-resident Indians (NRIs) use the company's website to gift Sony product to their relatives and friends. ''To ease the supply chain management we will be networking all our outlets with the Singapore office.''
In order to popularise Sony World, the company has doubled its promotion spend to Rs 4 crore with commercials to be aired on television channels and ads inserted in newspapers. For the company as a whole the ad-spend is around 5 per cent of the turnover.
Eyeing premium growth
About the company's bread and butter product, CTV, Ishii says Sony India will close the year selling 2 lakh units, registering a growth of 30 per cent compared to the last fiscal. Sony India derives 60 per cent of its sales from CTV sales, 15-20 per cent from mini hi-fi audio systems and the balance from imported products like handy cam, DVD, home theatre systems, car audio, recording media and others.
Sony India, in the meantime, has launched a flash memory-based new data storage device called Micro Vault. The ultra sleek plug and play device (about a length of a car key and the thickness of a highlighter pen) comes in four storage capacities - 32 MB (Rs 2,995), 64 MB (Rs 3,995) 128 MB (Rs 8,750) and 256 MB (Rs 11,995). ''The 256 MB Micro Vault can store data equivalent to 177 floppies,'' says Sony India manager (recording media and energy products group) Sumant Sharma.
Unlike other storage devices like floppies and CDs, the small device does not need any external power source. All one has to do to transfer data is to plug the device to the USB port of a computer or a laptop. One can easily copy PDF/MPEG files and even large databases in this equipment and share the same with others.
The reduction in peak import duty rate by 5 per cent to 25 per cent is expected to prod Sony India to launch more imported products.