As sales for Japan's major electronics makers languish around the world, the Mena area proves a rare and reliable bright spot. The regional chairman of one such tech giant explains how his company plans to build a bigger presence here.
Sharp picture of market potential
When Sharp, a giant Japanese consumer electronics company, shipped new televisions to the Emirates last year, it figured 60- inch screens would suffice.
But demand for ultra big-screen sets was so strong the firm decided to roll out 70-inch models just a few months later.
"This year we're going to launch an 80-inch [TV] in the Middle East," says Hiroshi Sasaoka, the chairman of Sharp Middle East.
"There's a big demand," he says, and not just from affluent locals and Arabs who have relocated here from elsewhere in the region. "Indian people living here, some Europeans as well - those people are purchasing big screen sizes," says Mr Sasaoka
In an era when shoppers are seemingly obsessed with getting their hands on the smallest gadgets, television makers such as Sharp are pushing hard to market jumbo-sized sets.
After all, in this segment of the consumer electronics industry, which the research firm Lucintel forecasts will reach US$1.2 trillion (Dh4.4tn) in five years, bigger is better - and more profitable.
Sharp could certainly use a boost in profits. This month, the company announced a $1.2 billion operating loss during its latest quarter and said it would cut 5,000 jobs. It joins other ailing Japanese electronics makers such as Sony and Panasonic, which all seem to be tuned into the same sad sales channel.
But as Sharp's brand presence falters elsewhere around the world, it has been expanding more aggressively across the Middle East and Africa (MEA).
It now employs more than 100 people in this region, up from about 80 less than a year ago. While its MEA revenue still makes up less than 2 per cent of Sharp's annual total, that figure grew more than 50 per cent during company's last quarter compared with the same period a year earlier.
"Our business is already expanding rapidly," says Mr Sasaoka, attributing the regional sales rise to the release of big-screen LCD TVs, refrigerators and air conditioners.
Yet he knowsSharp must roll out innovative products to remain competitive. Here, he discusses how the company's strategy in the region has evolved, and where it is looking for future business.
How has Sharp changed since you first joined in 1982?
When I joined Sharp, it was an analogue type of business. I believe Sharp has had a big change. In the 1980s, Sharp was in three major domains: in A/V [audio/visual] products; domestic home appliances; and then office machines, including products like the copier. On top of those three, Sharp is now in environmental products, which is solar-related products. This is becoming a new area of business.
In what sense?
We'd like to develop in this area insolar business because of the needs in Middle East and Africa and not only developed countries. Solar is applicable for [powering] independent houses. There is a big market for this application in Middle East and African countries. We are trying to develop [technologies] for independent applications.
Sharp is also expanding its portfolio of environment and health-related products here by marketing new air purifiers with so-called plasma cluster ion technology.
How is this supposed to help your business?
This is a unique [technology] we're adapting into the majority of home-appliance products. It [tackles] airborne viruses, mould and those things. For example, if a customer is suffering asthma and cannot sleep well, they can sleep well with this technology. This is one-of-a-kind technology to differentiate our home appliances from the competition.
How much business potential is there in this technology?
It's difficult to define the body of the market. It's in electronic devices for many types of home appliances. [It] is very difficult for customers to understand because it's not see-able. The customer can believe in technology if it's see-able but this not see-able. It's very difficult for us, which is why we're still trying to find many marketing ideas [on] how we can communicate this technology.
Where, geographically, have you most focused on expanding Sharp's presence in this region?
West African countries. Second one is the [Arabian] Gulf area. Because of the successful launch of [our] big-screen LCD TV in December last year, that is becoming one of the trigger products to expand our business. Also, refrigerators.
What is currently one area of Sharp's business that performs better elsewhere in the world than in the Middle East?
Electronics components. The big users for those electronics components are based in Europe and America. Most [gadgets] are manufactured in Asian countries. There is no substantial electronics manufacturing in the Middle East.
What is Sharp's greatest weakness when it comes to producing electronics for this region?
If you look at in our global business in detail, the turnover is less than 2 per cent of Sharp's total business. However, to make new growth of the company, Middle East and Africa should be a very important priority.
So how are your products being customised to sell in this region, even if they are not being manufactured here?
There's a different taste in each region, including Middle East and Africa. We make products which suit customers' needs in each region. We have product-planning departments in each manufacturing group and they are visiting those markets and see the needs of those people. [In the Emirates] we have to have high-quality and good-design products for domestic use, particularly for local Arab people. In the UAE, we also have many expat people who bring those products to their mother countries. This is very unique in the market, so Sharp can sell very [high-end products] to ordinary customers.
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