"There is no predictability in the Indian market", says Andrew Koh, senior director, Canon India

Andrew Koh, senior director, Imaging Communication Products Group, Canon India spoke on the uniqueness of Indian market, the key differentiator and growth plans among other things

Call it the impact of rupee depreciation or change in demand patterns or an internal overstatement, Canon India will not achieve its projected `2,350 crore of the top line in the calendar year 2013, as widely reported. Instead, it has set a revised over all target of `1868 crore-a mere one percent growth from 2012-in the year 2013. One of the reasons of this flat growth was the decline in the sales of entry-level compact cameras by 30%, in a scenario where cameras contribute around 45% of the total Canon India's revenue amidst printers, copiers and scanners.

In spite of the decline in revenue in compact cameras, the company was able to maintain a flat growth owing to the increase in DSLR sales as the price of an entry level DSLR is a three times the price of a entry level compact camera. By 2015, the company aims at 80% of the total revenue of camera business from DSLRs.
Amidst such a changing scenario, DQ channel met Andrew Koh, senior director, Imaging Communication Products Group, Canon India spoke on the uniqueness of Indian market, the key differentiator and growth plans among other things. As a group head of the division, his primary role and responsibility is to run the business looking sales, revenue as well as marketing part of it.

Since July 2013 you have been in India but before you were in Singapore. How different is Indian camera market when compared to Singapore? Comment on maturity and adoption trends.

Singapore is a very small market but a uniform one. In all different geographies, the market remains the same. Whereas in India, it is quite opposite because every state is different, which technically makes India a region more than just a country.

 

Singapore is a much matured market, at least in Asia Pacific, and one of the top four Asian markets for cameras. Almost everyone in Singapore have a digital camera, in fact more than one. Singapore is very fast adopter of new trends, new cameras and new models. So in respect, India is a bit different. Of course there are different pockets; there are different segments that are early adopters of new trends and new models but not the whole of India.

So that adoption and maturity is yet to come in India?
I think it has not reached that level yet and also we have a group here in India that has not bought its first digital camera.

What percentage of that group you think it is?
Hard for me put a number but I think it is at least 80%, assumingly.

So, according to you, the 20% of the population is dragging the camera market.
Yes and no. Assuming that 20% have digital cameras, we expect them to buy a new one and therefore, the other 80%, which I assume is not buying the cameras, will buy the first digital camera.

So India is a diverse, unpredictable market?
I think Indians leapfrog certain technology. There are people in India who have never ever owned a mobile phone but they buy a smart phone. I can see that happening because the smart phone sales have shot high. Likewise for camera technology there will be people who have never owned a film camera before or never owned a compact digital camera before but may leap-frog the technology and go straight and buy a DSLR-their first camera. Because may be to them smart phone serves certain function, basic level photography but they are interested in taking better photos. To take better photos, they make their leap.

So there is no thumb rule to predictability. I mean what technology they will adopt...
In Indian market there is no predictability. We see so many interesting things about Indian market. For example, demand varies from South to North market. In Southern states like Kerala and Tamil Nadu, wedding photographers know that Canon EOS 5 is the best bet for them where as in other markets any DSLR is good enough for wedding photography. So it is very hard to put a one general umbrella statement for Indian market. It will not be fair.

Coming back to camera business, Canon saw 30% decline in its compact camera business this year. What is the strategy to go forward, will it exit from entry-level compact camera business like Olympus has planned to do so?
We need to put more efforts but does not mean we are neglecting or exiting. We still believe catering to the whole market because for certain markets they are still looking for compact cameras. But the trick for us is to promote photography as a culture.
Where ever there have been decline in compact camera segment there has been a rise in DSLR, so it has balanced the revenue as the revenues may be three times the entry level. That offsets the decline of the revenue for the entry level.

Recently, Reuters reportedly quoted Canon on its declining DSLR cameras units world-wide-from 8.2mn units to 8mn units by December, 2013, over the same period last year.
It may not apply to India as it is a different market altogether. We are growing leaps and bounds in the DSLR segment with a growth of least 20-25% and we still think that there is so much potential to grow in this market. The whole focus is on now on DSLR. In the month of October itself, the overall revenue increase was 10% than the previous best and in terms of units, DSLR grew 10-15% over the previous high. This is testimony to the robust growth. DSLR now accounts 60% of our total revenues from the cameras.

Let's talk about the downturn. How have you strategized to tackle it?
We are looking to offer more value to our customers and through our 108 Canon Image Square (CIS) (Canon's exclusive retail outlet) where if you buy any camera, a free training is imparted to you. We are looking for 110 CIS by the end of this year spanning 56 cities in India and close to `172 crore of revenue came from CIS.

Where do you spot Canon in the DSLR segment in India?
Canon is a market leader in DSLR segment. Although it is very hard to get an official figure, I like to believe that we have 50% of DSLR market share in India. Worldwide Canon is an undisputed leader so why it should be any different in India.