Zooming Into the Imaging World

Gone
are the days, when a person had to give several thoughts to buy a
digital camera for his need. Today, it is increasingly becoming a
lifestyle product amongst people. The imaging industry is changing
rapidly with digital technology being widely adopted. Digital cameras
are replacing traditional film-based analog cameras. They are making
inroads into both the consumer and professional segments of the
Indian market. It is hard to pin-point a single reason for this burst
of interest in digital cameras, but a set of trend may provide some
indication. Rising incomes allow people to pamper themselves in
hobbies such as photography. Social networking sites- where one can
exhibit their work to myriad audience is also a reason for people to
indulge in photography. Technological advances and innovative
marketing strategies in the midst of price competitiveness have
brought down prices drastically over the years. In other words,
growing availability and accessibility is just one of the reasons for
the stupendous growth that the digital camera market is seeing in
India.

In
October-December 2010 alone, unit sales in digital camera recorded
69% y-o-y growth, according to CyberMedia Research's India
Quarterly Digital Camera Market Review. Manufacturers such as Sony,
Canon, Kodak, Nikon and Samsung India Electronics have significantly
increased their product portfolios with India-specific pricing,
introduced schemes and are concentrating on widening their retail
presence across the country. The India digital camera market recorded
a healthy growth in unit sales (shipments) of 76% y-o-y (April-June
2010 over April-June 2009). The overall market crossed 6,20,000 units
for the first time in a single quarter in Q2, CY'10. The digital
single lens reflex (DSLR) camera category witnessed a significantly
higher uptake, registering a growth of 557% y-o-y. This has been
revealed in IDC's India Quarterly Digital Camera Tracker, Q2, 2010,
August release. According to the research, in the point-and-shoot
(P&S) camera category, Sony was the market leader with a market
share of 24% in terms of unit sales (shipments) during Q2, CY'10,
followed by Nikon with 21%, Canon 16% and Kodak 14%. In the DSLR
category, Nikon was the leader with a 55% share in terms of unit
shipments during Q2, CY'10, followed by Canon with a 32% share.

Explaining
the
growing demand of digital cameras among the Indian consumers,
Alok Bharadwaj, senior VP, Canon India, said, “In India, the sales
of digital camera market stands at 3.2 million, incurring a growth of
about 50%, as compared to that of the last year. With rapid
technological changes and evolving con sumer preferences, a virtuous
cycle of adoption of lifestyle enriching devices, such as digital
cameras has gathered pace.” He added, “However, the household
penetration of digital cameras in India is only about 8% currently,
much lower than other developed countries where it is about 70%. But,
I expect it to nearly double by 2015.” Also, Samsung forecast that
the digital camera market would grow to 15.3 million units by 2015
from 1.5 million units estimated this year.

Sony
India is also continually fuelling the camera market by introducing
new and innovative products hat dynamically alter the digital camera
market landscape. Sony has already launched 31 new camera models this
year with some of them featuring advanced technology such as Full HD
movie recording, 3D weep panorama and high zoom. “We have about
17.4% marketshare in the compact digital camera market. Also, the
digital cameras are priced very competitively considering the
technical competency and superior design they offer. Cyber-shot is
ranged between Rs 4,990- Rs 22,990 and Alpha is ranged between Rs
34,990-Rs 49,990,” said Tadato Kimura, GM, marketing, Sony India.
Technology upgradation and falling prices have helped the digicam
market grow. “The latest innovations in the digital market are
driving the consumer to replace and renew their products. Two major
technologies, including- 'High Definition' and 'Low Light
Photography' are driving the digicam market in India,” said
Bharadwaj.

Touchscreen
technology
is the latest development from camera makers. Loads of
high-end features such as low-light sensors, accelerometers and even
dual displays make the digital camera an easy pick for gen-next
consumers. Speaking on similar lines, Kimura of Sony India, said, “We
have the 'T series' of Cyber-shot cameras. These are touchscreen
devices with advanced features such as sweep panorama, high
sensitivity and come with a dynamic, cool and stylish look.” Not
only the large players, but also the new entrants in the space like
BenQ are also riding high with positive hopes. Rajeev Singh, country
head, BenQ India, said, “For the camera business, we are targeting
the first time buyer with sturdy point-and-shoot cameras available at
a starting price of Rs`4,999 onwards. And, advanced technologies like
specific connectivities and GPS-functionalities are some of the more
interesting topics and picture manipulation is in demand in the
market now.”

It
is
not only the large entrenched vendors who are witnessing a growth
curve in the digital camera market, but also the SMEs are
aggressively getting into the imaging industry. Further seeing the
success and demands in the digital camera market in India,
Mumbai-based Ashwin Kukreja, CEO, Real Time Computer opined that the
distribution of digital camera contributes to about 20% in the
company's overall business growth. “The success of imaging
industry in India is easily evident. And seeing the huge success in
this space, we expect that the digital camera distribution will
contribute to about 70% by the end of this fiscal year. We recently
tied-up with Canon to expand our retail footprint, and would be
focusing more on digital cameras,” said Kukreja. Also, speaking
further about the success of distribution of digital cameras, Rakesh
Jain of Krazy Computer Valley said that digital camera marketing
contributes to about 50% in our revenue. “Today the demand of
digital camera is increasing among the customers especially the young
crowd. It has become a lifestyle product and we are also planning to
increase our distribution in this space,” said Jain.

SEASONAL HIGHS AND
PROMOTIONS

According
to
Pankaj Bandlish, CEO, Compro Computers India, the sale of digital
cameras attains its peak just before the summer holiday season and
also in other festive occasions. “Our margin of profit sees a huge
increase during the festive season or any kind of occasion. This is
because; cameras have now become big gifting items. Also, vendors are
helping the rise of digicam sales with the help of their smart
advertising ways,” he added. With competition intensifying in the
price category for the digital cameras, the vendors have taken to
advertising heavily. Sony too has used a celebrity- Deepika
Padukone-for its promotions. Kimura said, “The total marketing
budget for Cyber-shot cameras was Rs 50 crore for FY 2010-11 and
total marketing spend for the cameras in the interchangeable lens
category is Rs 25 crore by the end of FY 2011-12.”

Apart
from
summers, the celebration months-Diwali to Christmas-are also
the peak periods for sales, said Kukreja of Real Time Computer.
Talking about the marketing strategies for digital camera, Manoj
Gupta, CEO, Challenger Computers also pointed that every year, they
have an aggressive marketing campaign for seasonal highs. “With the
support of our vendors, we have managed to maintain growth momentum
in the distribution of digital cameras. The sale of digicams become
higher because of the seasonal discount and gift offers that we come
up with.”

SOCIAL NETWORK PUSH

Also,
according
to Bharadwaj, of-lately, social networking has picked up in
a big way amongst Indian Internet users, giving rise to the trend of
sharing photos online. Digital cameras score over their analogue
counterparts providing ease of use, ease of sharing content and
affordability. This has helped popularize digital cameras, especially
amongst young, urban users. Supporting his thought, Gupta said, “The
frenzy to shoot and then post pictures on social networking sites
such as Facebook has pulled up camera sales as well with the festive
offers.”

OPPORTUNITIES EXIST
BESIDES GREY MARKET BUGBEAR

It
is
good news to know from the market researchers that the number of grey
market buyers is going down and slowly it is expected to fall to 1
out of 5 in the market. The grey market represents unauthorized
dealers or shops that import the product bypassing Indiabased,
official distribution levels. A digital camera is often likely to be
available at a lower price in the grey market though it is unlikely
to have any manufacturer's warranty. Such grey markets thrive in
major cities such as New Delhi, Kolkata, Mumbai, and Bengaluru.
“Today, the digital camera market is worth Rs 500 crore. The grey
market rule in this space occupies about 50% of the market, which
further causes a loss of Rs 500 crore to the industry. This is not
only a loss to the camera companies, but also the government because
the grey market cameras are sold without the import duty taxes,”
said Bharadwaj.

The
grey market also poses a threat to the business of authorized
dealers. Being vocal on the problems that the grey market sellers
have caused, Kukreja said, “Just because of these unauthorized
dealers or grey market sellers, we face a loss of about 20% in our
overall digicam business.” Not only Kureja, but also Jain has
witnessed a huge loss for the unauthorized selling of cameras in the
market. “But, nowadays, the grey market selling has gone down to
almost 50%. Thanks to the government and vendors' smart approach to
it. They have managed to convert some of the grey dealers to our
official sales partner,” added Jain. Explaining the approach in
cracking the grey market challenge, Bharadwaj said, “With
our-box-out-of approach we have managed to cut down the grey market
rule in digital camera space. We have started to give extended
warranty, bundling memory card, case and charger along with the
camera.” Though the grey market vendors have not disappeared
altogether, they no longer swarm the lanes and have made business
simpler for the authorized dealers who operate alongside them.

Till
recently, the grey market had the biggest marketshare of digital
cameras. But, 2 years ago, if you had crossed any lanes like 'Camera
Gully' behind the CST station, swarmed with unauthorized camera
dealers, you would have been followed by voices persuading you to buy
a camera at a 15 to 20% discount. Of course there was a catch- o
bill, no warranty! Today, things have come a long way. However, the
future of digital cameras is quite bright in India. “In spite of
the challenges, the digital camera market is set to grow further with
camera manufacturers continuously experimenting with ideas amid
fierce competition to get a bigger slice of the market,” said
Kukreja. Also, holding onto this firm belief, Bharadwaj added that
the imaging industry is so fast moving in India that Canon sees a
major shift towards tier-2 and 3 cities as growth there is at about
55% as against 35% in the top metros. In fact, contribution from
these cities is growing at a rapid phase.

Bharadwaj
said,“We
have organized several training programs, channel
dialogues in these cities to empower and build their capacities in
order to strengthen the Canon brand.” “We are further increasing
our customer touch points through dealers, sub- ealers, distributors,
national retail and photo channel partners who help us gain more
visibility and accessibility to the customers,” concluded Kimura.