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Canon eyes tie-ups with retail chains

Canon eyes tie-ups with retail chains

Author | Source: The Economic Times | Saturday, Jan 28,2006 9:20 AM

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Canon eyes tie-ups with retail chains

It's not just global retail majors who are waiting to enter India. Global manufacturers already in India also want to ally themselves with these retail chains as their products represent the aspirational lifestyle. “We are in talks with retail chains, Indian and global, for tie ups. We should be able to announce the first few of these tie ups, with Indian chains, by March,” Alok Bharadwaj, vice president, Canon India, said.

He added that the company is negotiating with Videocon, which has a retail chain, Next, for electronic goods, since the chain expects to soon have 400 outlets. “These tie-ups will be an important route for us to take our range of products to larger markets. Digital cameras, for instance, have become lifestyle products, being light, elegant and aspirational. The same goes for camera phones.

We are getting inquiries from global retail chains wanting to enter the Indian market and who want us along. This will widen our retail presence,” Mr Bharadwaj stated.

There is another route Canon India is looking at - tying up with a national on-line photo printing service. The service is to be launched in Mumbai and Delhi, where Canon will provide the hardware that the service provider will use. Such relationships are common in the US but this will a first for Canon India. Mr Bharadwaj said that tie-ups with retail chains are of greater importance to the imaging &printing company.

Pointing to the digital camera boom, with the digicam having evolved into a lifestyle product, Mr Bharadwaj said that sales of the Rs 29,000 digital IXUS, the WiFi digital camera, will begin this month. The product was showcased in India two months ago. “We are targeting the commercial and home consumer segments with this product. We expect that it will have application for media houses since the wireless digicam captures the image, downloads it onto a laptop, via WiFi, and prints wirelessly,” he said.

Canon, which globally has been in a makeover mode, has found that technology has widened its market. So, it has a presence in the copier, fax, printer, projector, digital camera and cam-corder segments, where it has different competitors. Mr Bharadwaj said they have begun to use India for in-house software development. This 35-people centre at Gurgaon, is currently focused on document and display imaging.

Mr Bharadwaj was in Pune to launch Canon's 19th distributor for the rest of Maharashtra. “We now have 19 distributors in the top 10 cities and 1,000 dealers. By December '06, we will have 30 distributors. Our dealership increase does not include the tie-ups we are looking at with retail chains - those will be additional,” Mr Bharadwaj said.

While Canon digital cameras start at Rs 8,995, Mr Bharadwaj pointed to the Indian buyer's preference for a higher-end product. “We have found that 50% of our buyers prefer the mid to high-level product since this is seen as an insulation against obsolescence. We introduce new models twice a year, in April and November and the buyer tends to prefer to stay off the entry level product,” he said.

Canon launched digital cameras in India in '03 when it sold Rs 2.5 crore worth of goods. This amounted to 1% of Canon India's total sales of Rs 250 crore. Since then, the segment has been galloping at 100% annually, so that Canon India ended '05 with digicam sales of Rs 200 crore, amounting to 16% of total sales in just three years.

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