The last one-year has been interesting for Canon India. From being known as a camera and copier company, it’s moved on to being a reckoning force in the peripherals market. But this didn’t come easy to this 100% subsidiary of the Japanese imaging giant. Since it came in early 1997, Canon India has had a checkered past. Under the aegis of the then MD Dr Tony Fitzgerald, Canon India rolled out its office automation products, with stiff competition from Modi Xerox and RPG Ricoh.

Canon’s cameras were already selling through the Mahatta Camera Corporation. It decided to sell the copiers and fax machines through national distributors. The first three years of operation of the subsidiary didn’t turn out to be successful. The competition was too tough, and there was also the gray market to contend with.

About then, the IT industry was shaking up the world with its ups and downs. In 2000, when the Indian market was experiencing the Internet and IT business boom the increase in PC penetration led to a spurt in inkjet printer sales. At that point, there were mainly HP and Epson in the inkjet market. While Canon’s photocopiers and fax machines were doing average business, and cameras had their own presence, there was a need to come forward in the PC peripherals area too. Canon had printers in its Indian portfolio, and initially things looked okay, with market share reaching almost 12% at one point. But that was the short-lived effect of a push factor that dwindled later.

Coinciding with a market slowdown, 2001 saw aggressive price wars in the inkjet arena. Both HP and Epson dropped prices of their entry-level models. Canon’s inkjet share dipped to almost 3%. While HP and Epson had sound channel strategies, Canon seemed to have missed out on that. It was in this scenario, four years, and several top management changes later, that Alok Bhardwaj moved from Motorola to Canon as GM—System Products Division. He realized he had his work cut out for him—all he had to do was turn the company around. His first step was to conduct a market analysis. He found out that the dot matrix printer market was shrinking, inkjets and lasers were accounting for a steeply growing printer market share.

The slowdown had hit the dot matrix market badly—government spending had gone down, and the technology in any case was getting obsolete the world over. Only the growth in the banking industry seemed to give out a ray of hope. Lasers, on the other hand, had come to the centerstage. They witnessed a growth of about 15-20% even in the worst months of the slowdown. The reason for this was the effort taken to educate end-users on the advantages of lasers—speed, quality, and a low running cost. And then around July-August 2001, lasers too saw a fierce price war. Wipro started it with its 13K laser, Samsung followed suit.

The results of the market analysis led Canon to rethink its marketing and distribution strategies. Clearly the peripheral market was where the action was. Cameras were still Mahatta’s domain. Photocopiers were still there, and were picking up, but they weren’t enough. Canon needed a presence in IT, and peripherals were going to fuel that growth. But first, it had to set its house in order. Sales, marketing and support were integrated so that each executive could answer these needs by himself. Ten core positions were created—five of these were business development managers for Delhi, Mumbai, Chennai, Kolkata and Pune, and the other five were managers in charge of marketing programs, product manager, sales and marketing, support and co-ordination and consumer grievances. In all, 14 regional managers were appointed to head operations in different cities. This, apart from making the company organized, helped dealers interface better with it.

The second major change was that Canon shifted its distribution from national distributors—Compuage, Tech Pacific, and Wellwin—to regional distributors. This, coupled with the appointment of regional managers, meant that there was more efficient penetration of products. Increased service support was also added to this. In fact, the lack of it was holding Canon back to a great extent, as dealers needed that support.

In the past year, Canon seems to have finally hit paydirt in the peripherals market. Apart from its own strategies, problems faced by the competition have also helped. HP was preoccupied with its parallel shipment problems. Epson’s Stylus 480 didn’t live up to its expectations and Epson didn’t manage to recover from that, and Lexmark, which had so far been selling through TVSE, decided it was time to go solo and proceeded to revamp its distribution plan.

In late October this year, Canon India plans to launch more than 20 new products ranging from inkjets, direct photoprinters, scanners to digital cameras, camcorders, and more. With things more stable, Canon is confident that it’s the right time to take over the digital camera business. The future, according to Canon, lies in digital imaging. In September this year, they unveiled some of these products in an expo at Beijing in China, and the thrust clearly was on printing pictures at home directly from your digital camera. With the world reaching the level of digitization it has, Canon feels direct photo printing will make the printer and the digital camera together reach a level where they’re regarded as consumer appliances rather than just as IT peripherals. India, though not as far ahead as some other countries in the region, seems ripe to receive this technology.

The president and CEO of Canon’s South East Asia regional headquarter Singapore, Fukui Eiji, is confident that India is going to be an important market for Canon. He feels that in a few years’ time the market for Canon in India will overtake that of Malaysia’s. With the upcoming launch of products, and its distribution strategy in place, Canon India’s spirits are buoyant. How far these products will go in pushing Canon up is anybody’s guess. But with aggressive marketing Canon India is determined to make the best of them.

Nupur Chaturvedi computers@home