"Canon is continuously introducing new products in the market to provide customers with the latest in cutting-edge technology."

On estimated size of the Indian market

The digital camera (digicam) market in India is witnessing exponential growth. Year 2007-08 witnessed one million units of digicams being sold in India, against the 120 million across the world, with China and India accounting for the bulk of shipments, logging year on year growth of 25 percent and 50 percent respectively. The rapid transition from analog to digital makes India one of the fastest growing digicam markets in the world.

On your share in the market

Canon is continuously introducing new products in the market to provide customers with the latest in cutting-edge technology. Canon is aiming at maintaining the momentum for growth that was attained in the previous years and has clocked revenues of Rs. 317 crore in the first quarter of 2008. We are looking at achieving revenues of over Rs. 700 crore in 2008. Canon has undertaken many marketing initiatives and has been successful in its endeavors. We aim to reach revenues of Rs. 1000 crore by the end of 2010. We enjoy a great demand in the market and will continue our endeavors to increase our foothold in the market.

On key growth drivers of Indian market

The expanding IT market has been creating the desired foundation for digital products in the country. There is a noticeable growth in demand for consumer goods and durables that has been driven by a large base of a young consumer population. We expect to see a large growth in the consumer durable segment to be driven by digital imaging products. According to IDC, India is one of the world's largest growing markets for digital cameras. The Indian digital camera market is expected to reach Rs. 1000 crore by 2008.

Today's customer base is tech savvy and demands value for money and hence Canon provides them with a chance to experience its products before making an actual purchase, which is a benefit that cannot be derived from standalone shops. Canon realizes the immense potential of retail and is expanding its penetration through various formats.

Another essential driver for growth is our expansion plan to widen our reach in tier II and tier III cities. We are already strong in the top 10 cities. Also, our digital cameras are being sold by retail points in almost 300 towns in India.

On USP of your products and after sales services

The USP of our products has to be the Canon technology. Canon thrives by bringing to its customers revolutionary technology. Canon Worldwide invests 8 percent of its annual turnover in R&D to develop new technologies and products to cater to the customer requirements. We understand the need of our customers and design our products accordingly.

Canon has made a focused effort around breakthrough technologies across categories and we are continuing the momentum with an expanded portfolio of stylish, next generation, easy-to-use digital imaging products that will help to make lifestyle a reality for more people every day. The stylish looks and the advanced technology of the products give Canon a distinctive edge in the market. We believe in enabling connectivity between people, technology, and lifestyle. The digital camera segment is highly competitive and Canon has been successful in providing apt services and support. One of the main reasons for Canon to introduce new technologies is for customers to upgrade and adopt the latest technology products for their home and office.

Canon has set up 33 Canon Care Centers providing single point access to the customers for all their service needs for any Canon product. The Canon Care Center has been devised to ensure faster response, enhance personalized services, and provide access to built-in knowledge base. The centers are equipped with trained service engineers to handle repairs and queries.

The Canon Care Centers enable quick response, on time and on site service along with value-added service to the customers and provide an added impetus to our drive toward B and C class cities.

Overall, Canon's presence is expected to increase to 4000 outlets by December 2008.

On new products launched

Canon recently launched 85 products, which include a wide array of products across categories. The event witnessed unveiling of new products across divisions. These are 22 new products from Imaging Communication Products (ICP). These include 11 cameras, 3 camcorders, and 4 photo printers. These products feature new technologies and have been designed keeping in view the customer needs. They are ergonomically designed to suit every customer's needs.

On market and technical trends in the market

The increase in awareness on the options that digital photography offers to the consumers has been a key factor driving growth for digital cameras. Digital camcorders have been seeing increasing sales with people wanting to capture special moments with their families. The ease in transferring recordings to a PC for editing and sharing has been a key factor driving camcorder sales.

The Indian digital camera market growth was the highest in Asia and would continue to be so for the next few years. Technology trends in the image capture segment can be seen in the features and aesthetics of the digital cameras. Consumers are looking for the latest in technology. IT products have become lifestyle products, and hence aesthetics also play a major role. Customers want a complete digital experience and hence are preferring purchases at retail outlets rather than at standalone shops as they want to touch-and-feel all products before making a decision. Keeping this in mind, Canon is continuously introducing new products in the market to provide customers with the latest in cutting-edge technology.

On key divisions

Canon's Imaging Communication Products (ICP) division deals with imaging products. The products of this division are cameras, camcorders, and Selphy printers.

On plans and strategies for India

We, at Canon, believe that the most important and foremost strategy to penetrate into any market is to offer the customers products that are user friendly and sophisticated. It is our endeavor to provide the customers with products that are value for money. They should feel comfortable using the product and should have an enjoyable experience each time they pick up the camera.

Another important strategy for Canon has been to reach out to a bigger consumer base, both in the metros and non-metro markets through its products and marketing/communication strategies. In terms of products, our thrust has been on product customization for the Indian market. Product innovation is not being confined to the top end of the market. We are providing superior technology, differentiated products even in the mass segment.

India is one of the most promising economies and Canon plans to be instrumental in taking India to new heights. Canon is always looking at leading the market with technology innovations by enhancing value for its customers in India. Canon has been launching exciting products from time to time so as to enhance the value a consumer would get from the brand. The company is earmarking Rs. 70 crore toward the new marketing initiatives, which would include both above the line and below the line activities. Apart from different advertising campaigns for various products, Canon will also roll out new marketing campaigns customized for specific regions that will be introduced this year.

On key challenges faced by channels in India

There are two main problems our channels face. First is that of the unstructured, gray market. Most of the digital imaging products are available in the gray market without warranties or guarantees and at lower prices. This becomes a challenge as we need to educate the customers to buy genuine products for quality output. This is mainly a problem for our partners as they invest in stocks.

Canon has constantly undertaken initiatives to tap the unstructured market. For the same purpose, Canon has introduced the Canon Edge program. Purchasing a Canon camera not only gives the Canon edge in photography but also brings to the user the membership of the exclusive Canon Edge program, which is designed to enrich the experience of using a Canon camera. The members are entitled to free digital photography training session at distinguished photography academies after the camera is bought from a Canon authorized dealer. Canon has tied up with schools in leading cities like Delhi, Mumbai, and Chennai. With this program, Canon counters the gray, unstructured markets.

On major policy and regulatory issues affecting growth

We would also need the government support by way of reduced customs duties, thereby reducing the price differential between the organized and the gray market. The duties currently are very high - the countervailing duty, for example, stands at 16 percent and value added tax at 12.5 percent. This means the prices of the products are, at times, 40 percent cheaper in the gray market.