Japanese electronics giants such as Sony, Panasonic, Toshiba, Sharp, Sanyo and Hitachi have reportedly been hurt by the rise of home-grown Chinese home appliance makers such as Haier Group, TCL Corp. and Hisense Group. This competition has pushed Japanese companies into areas like high-end intelligent home appliances, business-to-business activities, construction, nuclear power, housing, automobiles, startup incubation and Internet of vehicles.
China Daily said that the some of the Japanese companies were forced to close down. For instance, Panasonic Corp. announced the closure of its last television production factory in Jinan, capital city of Shandong Province, in January, adding that it will instead outsource its TV production to Chinese contract manufacturers.
In August, Panasonic also shut its lithium-ion battery factory in Beijing and laid off 1,300 employees. But this year, the company shifted its focus to businesses related to automobiles, housing and B2B activities. It also set up a 1 trillion yen ($8.19 billion) fund to acquire firms engaged in those areas and gain quick entry.
"We have set a goal of 10 trillion yen in profit in 2018, with the B2B business accounting for 80 percent of the total. Further development of the B2B field is key to moving Panasonic forward. We will also be committed to B2B in China," Hidetoshi Osawa, chairman of Panasonic China, said.
Last year, Panasonic and Tesla Motors Inc., a U.S.-based maker of electric cars, teamed up to build a lithium-ion battery factory in the U.S. as Panasonic aims to double sales of its car battery-related business to 37.5 billion yuan ($6.47 billion) in 2018.
Masanao Yamauchi, general manager of Panasonic China Appliances Co., said that Panasonic also intends to focus on the high-end segment of intelligent devices and machines in China, to cater to the growing high-income middle-class families. The company wants to make products that would enable consumers to control appliances using their mobile phones, he added.
"Our aim is to connect different smart home appliances and create intelligent indoor spaces for families, communities and towns," Yamauchi said.
With Sony, Kazuo Hirai's appointment as president and CEO in 2012 has led the company to some form of restructuring. Sony sold its Vaio computer business and spun off its TV division. "Profit from the electronics business, except the mobile phones, has improved as a result of the restructuring," said Hirai.
Hirai said that Sony's priority is the Chinese market, alongside the U.S. It now has three key businesses in China, including consumer electronics, specialized business solutions and devices.
Nobuki Kurita, president of Sony China Co. Ltd., said that the company will focus on value-added products like high-resolution, extremely slim television sets, and imaging products and solutions, including specialized broadcasting audio equipment, projectors, digital cinema and B2B business involving medical and telecommunication equipment.
Last year, it launched the Seed Acceleration Program, a startup incubator that helps fast-track promising new business ideas. The program has already produced startups for smart locks, smart wristbands and smartwatches.
The Japanese firms' exit extended beyond China as Chinese TV maker Hisense acquired Sharp's TV factory in Mexico and its television business in the North and South American markets.
According to the report, Toshiba Corp. exited TV production and decided to focus on construction, nuclear power and infrastructure and other B2B businesses.
Zhang Yanbin, assistant director of All View Cloud, a Beijing-based consultancy specializing in home appliances, said that the Japanese giants' efforts to remain relevant are a result of Chinese enterprises' newly acquired mastery in home appliance technologies and cost advantages, which hurt the Japanese giants' profits. The shift to other areas "is a necessity" and a "strategic adjustment," he added.
Giving some advice, Liang Zhenpeng, an analyst of consumer electronics, said: "Japanese companies must simplify the decision-making process, improve operational efficiency and strengthen the transformation to intelligent and Internet-enabled fields."