1. For Canon, smartphone could be an opportunity

For Canon, smartphone could be an opportunity

India CEO says there will be an equal focus on consumer and commercial businesses, plus a push for CSR too

By: | Published: February 23, 2015 12:48 AM

With smartphones eroding so much of their mass base, you would be surprised if a camera company CEO said it was the best thing to happen to the high-end camera segment in a long time. That is the kind of optimism that Canon India and its president & CEO Kazutada Kobayashi have at the moment. “More people are now exposed to the joys of photography. If even 20% of these people go to
the next level then there would be a great demand for high-end cameras,” he says, underlining the fact that there has never been a point in time when so many people were clicking photographs.

Canon India, a 100% subsidiary of Canon Singapore, has achieved revenue of R2,026 crore in 2014, a 6% growth over the previous year. It markets over 200 contemporary digital imaging ranges in the county. Into its 18th year in India, the company today has offices in 14 cities, warehouses in 13 cities and employs over 1,000 people in the country. “Compared to my predecessors days, the economy has changed,” says Kobayashi, who has been in India since 2012. “Right after I came to India the rupee dropped quite rapidly and radically. And since we are importing all our products, it immediately affected our cost of sales,” he says.

“So my first half year was spent on managing the currency changes. We had no choice but to increase some market price. We also asked the headquarters to reduce the base price to absorb some of the price hike. The good news now is that rupee has started to stabilise. It gives us time for the factory to reduce production cost,” he adds, explaining how Canon India achieved a breakeven in 2013 and again became profitable in 2014. But Kobayashi says there wasn’t a big hit on demand during the period as customer sentiment was high despite the increasing prices.
Kobayashi says that Canon India will focus on both B2B and B2C products in 2015 and he is allocating resources equally between the two arms of the business. “Many people had reserved their investments before the general elections. Since Diwali we have seen good sentiment and people and corporates have started releasing their money and that is showing in demand.”

However, all camera companies have had to do some firefighting because of the decline in sales of compact cameras due to the increasing popularity of smartphones. “I think about 1/3rd of the market has been replaced by smartphones. However, I don’t think this segment will disappear and will instead evolve into two. One catering to people who can afford a smartphone, but don’t want to buy one. The other will be the demand for premium compact cameras that click pictures as good as DSLRs,” he says.

However, Kobayashi says the Indian consumers are very traditional as the demand for high-zoom bridge cameras and mirrorless cameras is yet to pick up in the country. “The mirrorless range will grow after a couple of years. The Indian market is still infant when it comes to penetration. It is still single digit penetration when it comes to households.In Japan, the DSLR penetration itself is over 100% of households.”

“The printer segment grew about 10% last year because SMEs now want to ensure the quality of their prints and paper as it reflects on the company’s image. Also, colour printers are becoming cheaper and easier to handle. These two have been a driver for growing our B2B side. Plus, commercial printing is also growing thanks to the popularity of wedding albums in the Indian market,” he adds. Canon has installed four Dreamlabo machines in India to give a boost to the photobook segment, again for the memorial pictures market. “This will give new impetus to the commercial photography segment in India,” he adds.

On top of Kobayashi’s agenda are CSR efforts which he thinks will help Canon become a household name in India. “We have adopted two villages. One near Gurgaon and another near Mumbai. By the end of 2015, we will adopt two more villages. We will invest in CSR maybe more than what the new Act requires,” he adds.

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