Appliance makers playing catchup in Asia

Japanese ditch complacency in regional push

by Siti Rahil

Kyodo News

SINGAPORE — “Localization” has become the new catchword as Japanese electronics manufacturers play catchup in Asia.

Japanese makers have scrambled this past year to roll out goods that cater to the needs of emerging markets in the region while struggling to keep costs down as the yen climbs in value and competition thickens.

Companies such as Panasonic Corp. and Toshiba Corp. have launched products with special features that suit local tastes and conditions, ranging from televisions that can run on rechargeable batteries to tiny refrigerators.

They have also simplified certain product features to make them more affordable in Asia, whose booming populations and economies are expected to drive explosive demand for consumer electronics in the next decade.

The move is designed to counter strong competition from Japan’s rivals in South Korea, whose products have gained more fans throughout Asia in recent years with stylish images enlarged by the popularity of South Korean pop culture — especially TV dramas.

It is also to counter the effect of the drooping dollar, which has been bolstering the yen and making Japanese exports more expensive.

Japanese electronics makers have begun to realize that banking on their reputation for high technology and quality alone won’t work any longer and that they will have to do more to catch up with their more innovative rivals. This includes shedding what young consumers in Asia nowadays call their “grandpa” image, industry watchers say.

“Japanese companies had been able to depend just on high technology in the past, but for the next age they should find some new positioning to overcome (South) Korean or other countries’ companies,” Masashi Koyama, regional strategy and insights director at Dentsu Singapore Pte., said.

“The strategy of the Japanese companies is just to catch up with the (South) Korean companies for their stylish and cutting edge designs and low prices,” he said.

Toshiba recently launched its “Power TV” in Southeast Asia and India, including the world’s first TV set to include a standby rechargeable battery.

The battery can last for up to two hours when fully charged — a useful feature in rural areas that are frequently hit by power outages. The TV set also has other features, such as a signal booster to overcome poor reception, an auto view that can adapt to various lighting conditions, and lower electricity consumption.

The company, which aims to carve out a 20 percent share of the Southeast Asia TV market next year, made Singapore the headquarters for its Asian television business in April 2010 “to enhance sensitivity to market needs.”

Meanwhile, Panasonic launched its first localized product for the Indian market in 2010 with an LCD television built specifically for India that consumes half the power of a normal television and with a sound system that is bass-heavy to appeal to Indians’ preference for strong sound.

The company only has a 6.5 percent market share of the LCD TV market in India, although it has a much bigger 50 percent share for plasma televisions.

It also unveiled the Cube AC, an air conditioner developed specially for the Indian market based on a survey on Indian household needs. The product comes with an energy-saving feature that uses “smart technology” to detect occupancy and activity in a room to regulate the degree of cooling. It is also designed with more flexible installation features designed to accommodate small Indian apartments.

For Indonesia, Panasonic designed a small, one-door refrigerator with simplified features and minimal power usage targeted at rural areas with unstable power supplies.

It also introduced a tiny refrigerator that is just big enough to store bottles of water — convenient in rural areas where people have a greater need to use the refrigerator to cool water than to store perishables.

While these moves are expected to boost sales for Japanese electronics firms, there are also concerns they are only good at catching up and may not be enough to help the manufacturers regain their former supremacy.

When advertising giant Dentsu asked about 500 people from Singapore, Vietnam, Indonesia, India, Malaysia, Thailand, the Philippines, Taiwan and South Korea in a recent survey on whether they thought Japan’s image is getting stronger or weaker, the response it got was sobering — 42 percent felt Japan’s influence is waning.

The problem is that Japan’s rivals are also moving fast in product localization.

A senior official at a big Singapore company active in India said he felt Japanese companies had not done enough to understand the Indian market.

Taking the example of the washing machine sale, he said, “Samsung has fared much better in India because it has managed to localize its products according to Indian consumers’ needs, whereas Japanese companies have not really done so.”

“They say Japanese washing machines are not reliable because India has got so many power failures. Every time a power failure happens, the Japanese machine will start from the first cycle onwards whereas the Samsung machine will stop and then when the power comes back, will carry on from there.”