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Annual Report 2011

Focus Areas for Growth -- Emerging Markets

  • Emerging Markets
Lastly, we have the promising emerging markets.

Global gross domestic product (GDP) is expected to grow by 3.5% annually through calendar year 2013, and GDP in emerging markets is expected to substantially outpace the global average. For example, it is said that the BRIC markets -- Brazil, Russia, India and China -- will account for more than 20% of global GDP in three years. Consumer electronics sales in the emerging markets are expected to grow sharply -- 18% annual growth is forecast for the BRIC markets -- and Sony views the emerging markets as vital to our growth strategy. We grew our sales (local currency basis) in the BRIC markets by approximately 40% in fiscal year 2010 compared to the previous year, and we expect our sales growth in the emerging markets to continue to greatly exceed that of the market.

There are considerable regional differences within the emerging markets, and therefore to capture market growth, we must ensure our operations are rooted firmly in each local community. Looking ahead, we will grow by capitalizing on our accrued brand strength, and on our extensive and carefully tailored local sales networks, as well as by taking advantage of our unique position as a company with operations that also encompass the B2B and entertainment fields.

In March 2011, I visited India's entertainment capital, Mumbai, to take part in a ceremony to inaugurate the Sony Media Technology Centre.* There I had the opportunity to speak with people involved in the production of movies, television and other content both from inside and outside Sony, and I could feel just how vital the entertainment industry is in India. I also experienced firsthand the energy of this fast-growing nation, and was particularly pleased to see bold "Sony BRAVIA" billboards along roads abuzz with speeding cars and auto rickshaws.


  • Brazil
  • Brazil
Brazil will host the 2014 FIFA World Cup Brazil™ -- for which Sony is one of the Official FIFA Partners -- as well as the 2016 Summer Olympics (Games of the XXXI Olympiad). Middle-income consumers account for approximately half of the population and are the driving force behind Brazil's economic growth. Sony's extensive selection of appealing electronics products, produced at its site in Manaus and third party manufacturing providers, drove Sony to achieve a sharp sales increase in Brazil, outpacing market growth in fiscal year 2010. Sony is the overwhelming market leader in compact digital cameras, with a market share of approximately 50%, and has recently doubled its LCD television market share, becoming one of the top three LCD television brands in Brazil. Sony is in the leading position of each entertainment business -- music, pictures, TV programs and game -- and brings about a greater synergy with the electronics business by utilizing its strong brand. Sony is realizing profitable growth by expanding its network of directly managed Sony Stores, as well as its e-commerce, and by responding flexibly to the regrouping and realignment of major retailers.


  • Russia
Blessed with abundant natural resources, Russia has seen its economy expand steadily since the global economic crisis of 2008. In this environment, in fiscal year 2010 Sony achieved record-high sales in the Russian market, emerging for the first time as the frontrunner in the markets for compact digital cameras and portable audio players, among others.VAIO®, PlayStation® and other Sony sub-brands are strong, as is the Sony brand itself. Sony expects network-enabled products to emerge as a new high-growth business in the Russian market.


  • India
India has a population in excess of one billion, and continues to see rapid economic growth. Sony is expanding its national sales network in India, which comprises offices and shops tailored to the local market. Bolstered by successful television advertisements and in-store promotional efforts, in fiscal year 2010 Sony garnered the top spot in the local markets for a variety of products, including LCD televisions and compact digital cameras. SPE initially entered the entertainment business in India in 1995 with the launch of the Sony Entertainment Television channel joint venture, and now has a portfolio of television brands offering a variety of programming, including general entertainment, comedy and movies, thus helping to strengthen Sony's brand in the country.


  • China
China, the world's second-largest economy, has seen the focus of economic growth expand from coastal areas into inland regions, underscoring expectations of further market growth in the years ahead. Sony has established a nationwide sales network that centers on Sony-branded stores, as well as a solid operational framework that strives to maximize sales channels, and continues to see increased profitability and revenue growth. Sony's focus in China is not limited to consumer products, but also broadcast- and professional-use equipment, earning it a solid reputation as a top brand in HD and 3D from the lens to the living room.
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