Philips targets broad Indian audience

22 January 2013

NEW DELHI: Philips, the electronics to healthcare group, is seeking to develop both high-end and affordable products in India, and thus serve the majority of the country's stratified customer base.

Frans van Houten, the firm's chief executive, told Forbes that two key trends have reshaped the market in India, and require a rapid response from brand owners.

"First, what deeply impresses me about India is the huge talent base," he said. "Second, and it is a paradox, you are at the forefront of technology while at the same time have a huge rural population. So we need to cater to both sections of society."

As an example of this process, the R&D centre run by Philips in Pune created low-cost catheterization laboratories, having discovered that 1,000 hospitals were hoping to add these facilities.

This offering was explicitly targeted at community hospitals. "While we continue to provide high-end solutions, we also have good solutions in affordable health care," said van Houten.

Philips operates another R&D hub in Bangalore, and this has proved similarly profitable in terms of creating technologies that possess global potential.

"Much of the healthcare product development in Bangalore gets exported to all over the world. I dare say that there is no health care product sold by Philips that doesn't have some intellectual property out of India," van Houten said.

Asia now delivers nearly 35% of Philips' revenues, compared with the figure of 26% logged by Europe. These totals stood at 35% and approximately 30% respectively five years ago.

"The European market is in trouble but there are opportunities in the Middle East, Russia and India; people need to shift gears and change focus towards the growth areas," van Houten argued. "And local relevance means that the whole might and power of the company shifts."

Corporate social responsibility has been a major point of focus for Philips at the global level, including rigorously assessing its suppliers and partners to ensure high standards are met throughout its corporate "ecosystem".

"It is not just an issue in India but all over the world. More than ten years ago, we prepared a strong internal business principle statement that every employee signs up to. Adherence to business principles is a must," van Houten said.

"And that means everywhere and in India, we would rather decline business than participate in practices that are unjust. If it happens, we take immediate action."

Data sourced from Forbes; additional content by Warc staff