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Rediff.com  » Business » Camera makers bank on retail biz

Camera makers bank on retail biz

By Suvi Dogra in New Delhi
March 10, 2008 14:15 IST
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With increasing disposable incomes and rising consumer awareness for genuine products, camera makers are bullish on the Indian market. Canon India, for example, hopes to generate 50 per cent of its revenue target of Rs 1,000 crore (Rs 10 billion) from cameras alone in 2010.

The company plans to take the retail route for ensuring stronger sales. At present, the company expects over 30 per cent of sales to come from retailers such as Home Solutions, Vishal and Spencer's.

The company has also set up exclusive brand shops in New Delhi and Bangalore to showcase latest products.

According to experts, the compact camera market in India is estimated at 1 million units, while it is 12,500 units for professional cameras. Both categories have been growing at a CAGR of 30 per cent in the last three years and the momentum is likely to continue.

Nikon has big plans as well. Despite being a late entrant in the Indian market, the company hopes to garner a 45 per cent market share of the digital SLR market and 10 per cent of the compact camera market by 2010.

"In order to achieve this target, we are aiming at 100 per cent expansion in retail consumer outreach through our dealer network," said HidehikoTanaka, Managing Director, Nikon India.

The company plans to take the number of dealers in the country to 1,000 fromĀ 400 by 2008-09. Nikon products are available across traditional multi brand outlets and consumer electronics retail chains such as Croma.

For Sony India, the exclusive retail store network contributes 35 per cent to revenues. The company, which introduced 17 new models last year, has 7,000 channel partners and 260 Sony outlets.

Samsung India, too, plans to up the ante in the camera segment through 115 Samsung Digital Plazas. The company also has tie-ups with Reliance Digital, Croma, and other multi brand outlets.

While the Indian import duty structure has compelled Nikon to operate on low margins, the biggest challenge for the company remains grey market sales.

"Our biggest competition in India is Nikon itself. Nearly 80 per cent of the Nikon products sold in India are through the grey market," says Tanaka.

While grey market is canabalising into Nikon share, others like Sony and Canon do not give it much weight.

"We look at the grey market as a missed opportunity," says Alok Bhardawaj, President, Canon India.

"Our strategy of branded stores in leading locations that offer international shopping ambience, guaranteed product quality, warranty and widespread after-sales are acting as catalysts in changing customer preference from grey to original products," says Sachin Rai, Product Head (digital still camera), Sony India.

Also, the government's initiatives such as reduction of duties and FTA policies have led to a decline in the hold of the grey market.

Further, the emergence of organised retail through large nationwide store chains has further strengthened the position for original products.

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Suvi Dogra in New Delhi
Source: source
 

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