"We will cut down our pocket to benefit partners"

It was heartrending to read and hear about a company-once synonymous with photography-file for bankruptcy protection. Eastman Kodak Company, which invented the hand-held cameras and also the first company to bring digital cameras in markets, ironically failed to adopt newer technologies. Reports suggested that since the year 2007, the company did not observe profitability and hence the failure. However, after a year-and-half on September 3, this year, Kodak announced that it has emerged out of bankruptcy. 

Amidst its high-speed digital printing technology, the company also seems bullish around its digital cameras where India may prove to be a key area. Recently, MCC Group, a sales and distribution company for imaging and entertainment products, got exclusive distribution rights for Kodak digital cameras in six countries including India. Headquartered in New Delhi, MCC has been in this business for the last 20 years. It also launched in house products, where Ajay Mehta, managing director, MCC group believes to bridge the gap between a high-quality branded product and a cheap, low quality product.

Kodak exited from bankruptcy recently on September 3 this year. What is the strategy in India?
We are not privy to September 3 Kodak's revelation but what we know is: Kodak has given global rights for certain products to certain companies. One of the products is digital camera and global rights of these have been given to J K Imaging, a US based company. JK Imaging has appointed MCC as its partner or exclusive distributor for India, Nepal, Bangladesh among others.

Kodak was once synonymous with photography. How bullish you are with its camera in Indian market.
It still is. It is one of the strongest names in the photo business anywhere in the world; not just in India. As far as we are concerned; the Indian channel-dealer network and retail-know this brand very well. So there is no issue in terms of recognizability or acceptability because Kodak digital camera in itself was in fact, a very large business in India. So the channel knows it very well. And the brand is synonymous; it is like coalgate of photography.

According to a 6w research, around 4,48, 950 cameras were shipped in CY Q2 2013. Sony, Canon and Nikon held 90% of the market share in terms of units. How do you place Kodak in this scenario?
I am not aware of the data but let's presume it is correct. But the fact is that Kodak wasn't there. Kodak was out of the market about a year. But now it is back. Logically Kodak's entry level cameras will see huge growth in numbers but that is same for every brand. We aim at gaining at least 5-7% of market share i.e around 2 lakh units, by the end of September next year.

So, how do you bank upon Kodak digital cameras? What unique features it comes with?
This industry is not driven by features, especially in branded products. Ofcourse features are important but it is almost standard for all the brands. However, there are two unique things that Kodak is going to bring. First: the High Dynamic Range (HDR) ability. Under this technology- in a low light condition-the camera will shoot three pictures at the same instance. It will then layer the three pictures to create a fourth one--a more dynamic picture. This kind of technology is available in very high end branded products, priced in the range of `30,000 to 40,000 and above. But in Kodak we are offering this technology at `12,990 i.e in all our Pix Pro models. So I don't think any other brand will have something similar.
Secondly, all Kodak cameras come with proprietary Aspherical lens, which cuts the distortion. This is even available at `4,990 cameras.

So how do you see the general digital camera market in India? Is there any competition with smart phone market which caters to, say, basic entry level or low end photography needs?
As far as the digital camera market is concerned, I don't think it can run away from fact that smart phones are eating into it. However, having said that: If you need a picture, you still need the digital camera. So I repeat: If you need a print out of your picture or a half decent picture, you need a digital camera. Secondly, digital cameras are now split into several segments: entry, mid and then high end. Globally, the entry level cameras are affected due to this. However, in the Indian context, I think it is a great opportunity because most brands have opted out of entry level cameras and therefore, we have an opportunity to serve the entry level segment. Also in India, the market exists very aggressively as socio-economic break up of our country is different from of Europe, America or so on and so forth. For example, there are geographies where consumers invest only in regular feature phones but don't get quality image. This is where we come in.

So what is your go to market strategy?
The product is again segmented. In the entry level and lower mid-end cameras, we will focus on with the distribution network, which are the retail stores. We will use our distribution network to go into tier-2-3 cities. But for upper- mid and high-end range of cameras, we will be focusing on large format retailers as they have a good presence in the tier-1 cities. They have environment and are used to sell high value cameras.

What is in up for channels?
We will add around 75-100 resellers in tier 2-3 markets, again by the end of September next year. However, Camera is not a commodity which is sold like salt and pepper, it is a specialty trade. So there are specialists who deal with it and we will go with them. Also, the chance for profitability for resellers and dealers is quite aggressive. They can hope to make money from margins

How has the downturn affected the decision making/strategy?
There has been a dramatic devaluation of rupee. This is a serious issue because at some point the price gets affected. Initially we calculated at `52 or 53 (exchange rate per dollar) but now we are calculating at `63; that is a 20% jump and it is huge. No brand makes 20% margin and it will affect the consumption rate.

Still you are saying that you will give enough margins to your partners?
This is our daily dilemma. We still have to do it and a good job of it, even if we have to cut ourselves down. That is the part of the program.

Also, MCC has its own in-house products like mobile phones, speakers, dvd players etc. What is the rationale behind this?
To be very blunt and simple, there is a demand for it. There are branded products with good quality and then there are some very cheap unbranded products, which are compromised in quality. So the delta between the two is quite huge. Somebody like MCC will come in the middle and say that: brand compromised, price compromised but quality not compromised. Is there any buyer? Yes and our main customers are at tier2 and tier 3 levels. Yes, we are not targeting South Delhi or South Bombay customers.