'Our plan to achieve Rs 1,000 crore revenue by 2010 is on track'

Q&A: Kensaku Konishi and Alok Bharadwaj

Canon has been annually launching around 100 products in India. The year 2008 saw a 31 per cent growth rate, to touch a top line of Rs 665 crore. On the launch of its high-speed mono production digital press range, KIRTIKA SUNEJA AND SUVI DOGRA caught up with Kensaku Konishi, President & CEO, Canon India, and Alok Bharadwaj, Senior Vice-President, to discuss the company’s plans. Edited excerpts:

Canon India had a revenue target of Rs 1,000 crore till 2010. Is it achievable in the current scenario?
Konishi: Yes. The plans are on track and this year, we clocked sales of Rs 840 crore, 25 per cent more than last year. In fact, in March-April, the sales increased 34 per cent from last year. We are confident of achieving this target and expect around Rs 200 crore from the printer segment and Rs 250-300 crore from the camera segment.

We will see the copier segment grow from next year. The slowdown has not impacted the laser printer segment because of our marketing campaigns in both small and big cities and that increased our market share to 30 per cent in this category. The inkjet segment, too, is growing, as that caters to the end consumer. The enterprise segment has been hit globally, but we do not invest much there.

But you have lost the number one spot in compact digital cameras to Sony.
Konishi: Sony has a very aggressive pricing strategy across the globe, which has helped them grow. Though we don’t expect our share in digital compact cameras to increase this year, given the economic environment, the market is still growing. So, we can grow 20-25 per cent. The digital single-lens reflector (SLR) category is growing and we hope it adds to our revenue stream this year.

Will there be a change in the product portfolio?
Konishi: Currently, cameras contribute 25 per cent to total revenues and printers’ share is 20 per cent. The rest is copiers. We will keep this portfolio for some years and there will be no change.

What about your expansion plans?
Bharadwaj: A company can expand on three fronts — geographically, vertically and by adding more products. We are expanding geographically. Three years earlier, 80 per cent of our revenues came from the top six cities; now these contribute 49 per cent to revenues. Tier-II and Tier-III cities contribute 51 per cent. On verticals, we are now concentrating on education, energy and power, as they are recession-proof. Lastly, launch of high-speed mono production digital press range shows we have entered into high-speed transaction in printing areas. Also, the government sector will become bigger. It is currently Rs 100 crore and has been flat for the last four months.

Will there be a headcount increase this year?
Konishi: Last year, we increased the headcount from 400 to 700. This year, there will be an increase of about 100 people. Going ahead, we will add around 200 people in India.

How important are marketing alliances at this point of time?
Bharadwaj: We already have alliances with system integrators like HCL, Lenovo and Zenith, among others, and also with service providers. However, now we will develop alliances with national retail chains like Croma and Jumbo. These will be high-level strategic alliances wherein some retail chains, who will be our preferred partners, will have exclusive rights to display and sell our products for some time. We are in talks with about 15 national chains and by 2010, expect to have relationships with them at different levels.

What about your after-sales services?
Konishi: We have seven direct repair centres presently and will expand these to 10. Each store requires an investment of Rs 35-50 lakh. We also have some plans on advertising and marketing.

Bharadwaj: We are going to offer the facility of rental machines through our team of 80 sales people in the Direct Sales business division that handles the top 500 corporate accounts, as well as the commercial print segment in India. This year, the rental business will be contributing Rs 60 crore to Canon India’s turnover. We expect the rental business to contribute Rs 100 crore, as we target Rs 1,000 crore revenues next year.