For the top management at imaging company Nikon Corporation, India is emerging as one of the most progressing and promising countries for sales. At present, Nikon India contributes only 1% to the Tokyo-headquartered company’s global turnover.
However, it is doubling turnover every year, Ichiro Terato, executive vice-president, CFO and representative director, Nikon Corporation, told DNA.
“Compared with any other country, India is the fastest growing market for Nikon. Top management expectation from India, at Nikon, is very high. Every year, Nikon India turnover is getting doubled,” Terato said.
China, a market where Nikon products have been long available even before the company set up a subsidiary in 2005, is already exceeding in turnover compared to that of the parent company in Japan.
Terato said it could take India about 5-10 years to do the same. “The growth coming in over the next 5-10 years in India will be the best ever for Nikon,” he said.
Nikon India, established as a wholly owned subsidiary in 2007, is looking to sell 4.8 lakh compact cameras in India this year of the total 28 lakh units that are likely to be bought by Indian consumers.
The DSLR (digital single-lens reflex) camera segment, where Nikon globally competes with Canon Inc, already has a 55% market share in India. About 1 lakh DLSR cameras are expected to be sold in India this year, of which, Nikon is hoping to sell 55,000 units.
As of last year, Nikon was already the number one player in the compact camera segment in the US with more than 22% market share. It hopes to create the same effect in India’s compact camera segment where it has a 20% market share.
“Yes, this (India) is a very competitive market and may take time but expectation of Nikon’s top management is to achieve this in two years,” Terato said.
Comparing the passenger car sales with that of cameras in India, Terato said that interestingly the number of passenger cars sold in India in 2009 was 1.8 million while the number of cameras sold was 1.5 million. “Not many countries have such figures, because compact camera sales are always much more than the passenger car sales. So, there is room for great improvement,” he said.
The segment had seen a drop in global demand during 2008-09 which, Terato said, the company has already recovered in 2010 where the global camera market recorded highest sales. The demand for cameras, however, is much less in mature markets like Europe, North America and Japan as these markets have high penetration in the category. The future growth for demand in cameras will be driven by ASEAN countries, Asia, Latin America and the Middle East.
Unlike 20 years ago, where cameras were an expensive commodity, these mature markets today witness each family using multiple cameras led by individual demand. The company thinks this is a trend that has already started to emerge in India in a small way.
Terato said that Nikon is on its way to develop a product that will appeal to the youth globally. “We are strong in the professional segment and equally so in the beginners or the entry-level segment. For DSLR, we are now looking to develop a new-generation product,” he said.
Terato said that the company will be more aggressive on the marketing spends in India. Last financial year, Nikon spent Rs30 crore on advertising and promotions and doubled that to Rs62 crore this year. And taking that trend ahead, the company will spend Rs120 crore next year.
In order to grow its distribution network faster, Nikon India starting moving away from having a national distributor to multiple regional distributors, two years ago. This will help the company increase the number of outlets its products are being sold through to 2,500 outlets from 2,000.
It also started collection centres in Tier 2 and Tier 3 towns. It will now double the number of collection centres from 20 to 40 within this fiscal. It will also open five new service centres in the country taking the number of centres to 25 next year. “After sales service is of top priority, even for India,” Terato said.