Fuji launched 12 models yesterday; Samsung is planning 10 next month and Nikon is opening retail zones in a hurry.
If Fujifilm launched as many as 12 digital camera models in New Delhi yesterday, competitor Nikon was busy in Mumbai. While opening two new Nikon D-SLR and Coolpix zones in the city, Managing Director Hiroshi Takashima said Nikon will increase its retail outlets to 2,000 from just 81 now.
That’s not all. Samsung is planning to launch 10 new compact camera models next month and Sony recently unveiled two D-SLR, or professional, cameras designed with the world’s first translucent mirror technology.
This, companies say, is just the beginning of a flurry of launches that will take place this year. For, according to Cyber Media Research estimates, in 2010 the overall digital camera market was 2.68 million units. The compact camera segment (2.55 million units) dominating the bulk of the overall market is growing 40 per cent year-on-year. The D-SLR segment, though small (0.13 million units) has witnessed a 100 per cent growth in the last year.
There are other reasons as well. In a country with 230 million households, digital camera penetration is a meager 3 per cent. Compare this to the US, where it is 70 percent. Industry observers are optimistic and think the market will touch 10 million units by 2015.
No wonder, camera makers are focused on everything from image building, technological innovation, competitive pricing and wider reach to make their presence felt.
Compact growth
Apart from a large young population and an increasing base of first-time buyers, lifestyle factors like rise in travel and increase in the scale of family celebrations are also influencing compact camera sales,” notes Alok Bharadwaj, Senior Vice President, Canon India.
In the compact segment, which makes up the largest chunk of the market, Nikon and Canon are devising new strategies to catch up with market leader Sony (27 per cent market share). Sony’s camera business contributes 20 per cent of the overall turnover of Rs 5,700 crore.
Nikon’s immediate plan is to improve the quality of after sales service. Also, 30 per cent of the brand's advertising budget will be spent during the IPL (Indian Premier League)
Canon’s strategy is to increase its offering in the entry level price band. “We will introduce seven entry level cameras priced below Rs 10,000,” says Bharadwaj. This largely draws from the insight that India is a price-conscious market and 70 per cent of overall camera sales in India are below Rs 10,000.
Currently camera sales account for 40 per cent of Canon India’s turnover of Rs 1760 crore.
Fujifilm too has lowered its prices to appeal to the price sensitive Indian consumer. “Our digital cameras in India are cheaper by 10-20 per cent compared to global prices,” says Annur Rajkumar, Country General Manager – Digital Imaging, Fujifilm India.
Samsung, with its new line-up will strengthen its focus on the mid- and premium-end of the market (above Rs 10,000 price band). “The key differentiator for our cameras is the ‘dual view’ with LCDs on both sides allowing you to take self portraits,” notes Ravinder Zutshi, Deputy Managing Director, Samsung India.
Sony scores over competition due to its excellent distribution reach. According to Bharadwaj, in the last five years, camera retail has shifted from photo outlets to consumer electronic outlets, where Sony has an advantage. Sony’s 270 exclusive retail zones is a huge plus and accounts for close to 40 per cent of total camera sales, estimate rivals.
To take on rival Sony, Canon is increasing footprint of its exclusive Image Square zones. The zones currently present in 11 locations, will see an expansion to 100 by end of the year, in the top 30 cities. “Improved distribution has helped players combat grey market sales,” notes Purnendu Kumar, Associate Vice President, Technopak India.
Tata Consultancy Service head (retail & consumer practice) Anil Rajpal believes the growth of modern retail will allow consumers to visit dedicated stores to learn and understand the product. For now, Canon has deputed 350 promoters at large format retail stores who educate consumers on features of the camera. Fujifilm, on the other hand outsources point-of-sale staff to a specialist.
D-SLR demand
Unlike the compact segment, the demand for D-SLR cameras in India is relatively small. Although the D-SLR segment captures only 1 per cent of the overall market, according to IDC, their sales grew twice that of compact cameras last year.
This is being driven by second time buyers who are upgrading from compact cameras to ‘prosumer models’. “With disposable incomes rising, there is a trend towards multiple ownership of cameras, with the second camera often being a D-SLR,” says Nikhil Khurana, Lead Analyst, Cyber Media Research. Plummeting prices is also driving growth of this segment.
Yet high prices of interchangeable lenses which are subject to an import duty of 10 percent is a challenge, and leads to grey market sales. Fujifilm for instance discontinued the D-SLR line-up from its global portfolio a few years ago to put a bigger focus on prosumer category. “Our prosumer camera, the HS 20 has 60 percent of the features of a professional camera but is relatively cheaper,” says Rajkumar.
In the D-SLR segment, Nikon and Canon compete neck and neck and have captured almost 90 per cent of the market. To promote its D-SLR range, Nikon has doubled the count of its D-SLR zones and have also opened a photography school in both Gurgaon and Mumbai, says Takashina.
While it is still a long way before digital cameras achieve the same level of acceptance as mobile phones, for now it’s a pretty picture for both consumers and digital camera manufacturers.
