The season is on us!

Digital camera penetration in India stands at a negligible 6% when compared to the developed nations of the world (hovering at 80-90%). And it is this huge potential that makes India one of the most lucrative markets to be in. The compact camera segment in India too has suffered a down surge of 12% in Q2, 2013 and is expected to cross 3 million units by the end of the year. Digital camera brands (mostly Japanese, in case you missed that!) here have a clearly dynamic focus on strategies that they have designed for a price sensitive and complex market like India, and have to reinvent themselves regularly to stay ahead of the league.

One marketing misstep can take a company back several steps. And when it's the festive season in India, you can safely change that to 'several miles'. Especially when you are going through a slowdown, this is that window of opportunity when the most pessimistic of consumers can shed their inhibitions and choose to revel in some indulgence for a change. And if you don't grab this opportunity, the competitor would, and take a lead that will be extremely hard to challenge.

Slowdown and rupee depreciation have created a lot of pressure on leading camera players in India as well. From an estimated growth of 30-35% in the past few years, growth has come down by 10% when compared between first two quarters of 2013. In Q2 2013, Indian camera industry registered 4,48,950  digital camera shipments as compared to over 5,00,470 units in Q1 2013. Players have started gearing up with aggressive and innovative tactics that may boost their market share in a dynamically changing Indian camera industry. While Sony India has recently launched Cyber-shot DSC-QX100 and DSC-QX10 lens-style cameras with a price tag of Rs.24,990 and Rs.12,990 respectively in the compact camera segment, Nikon India has turned up with an exciting new range of cameras – S6600, along with Coolpix A series, S series and P series – to impress shutterbugs looking for new propositions. To one's surprise, relative latecomer Fujifilm has been working aggressively to move away from ultra low cost camera segment as Rohit Pandit, EVP, Fujifilm advocates the move, "We have made reasonable progress, and have decided to move away from the ULC segment because we are confident of the depth and width of our portfolio we have, which can compete with any of the competitors in the marketplace.” Conversely, DSLR prices look to be heading southwards, since players want to shun the premium positioning at the moment. Clearly, different players are seeing their growth potential in the market differently.

In this financial year, companies have greatly increased their promotional budgets to retain top of mind recall. While segment leader Sony has announced a steep 45% rise in the budget for promotional strategies to Rs.6.50 billion for FY2013 (up from Rs.4.50 billion last year), Canon has decided to slash prices of several models with a discount ranging 10-40% and expects its revenues to cross the Rs.22 billion mark in 2013. Fujifilm has also promised heightened promotional activity with a blend of BTL, print and digital initiatives. It aims to touch 10% market share in the current fiscal and nearly 15% by the end of the next fiscal.

While the next few months will see heightened competition and offers, the ultimate outcome on who gains most will greatly depend on the dynamics that have evolved over a period of time in the Indian camera market. According to a senior official at Canon India, "The average age of an Indian today is 25 years, who has a lot of energy and disposable income in hand. Unlike in Japan, where the average age is 48 years, an Indian consumer likes to go out. Factors like frequent travel plans combined with competitive pricing are what make India a lucrative market." And companies realise that it's advisable to capture these consumers early in the day. So there is a marked shift in the approach to branding. Where just a few years ago, none of the players relied on signing celebs as mascots, companies are roping in young celebrities who are making a mark in Bollywood. While Fujifilm has signed Bollywood Diva Minissha Lamba as its brand ambassador, Nikon, Canon and Sony have roped in Priyanka Chopra, Anushka Sharma and Deepika Padukone respectively for improved sales numbers.  The strategy is clear. There has been a strong imaging culture that has been created among the youth. Signing such brand ambassadors helps in generating a larger set of followers. It is not only about signing celebs. Companies are also targeting the youth through the much acclaimed social media space, which enables a two-way interaction between marketers and customers and enables the former to understand the latter's needs and expectations better. Marketers today are expanding their digital wing aggressively by engaging with customers across various platforms like Facebook, YouTube and Twitter. And they are doing it in real time.

When it comes to reach, Sony would certainly fancy its chances of taking the largest slice of the cake. It had a stronghold that stands close to 12,000 channel points in FY2013. Sony already leads the industry with 38% market share in the compact digital camera segment, followed by neck-to-neck competition between Canon and Nikon. For Sony, the contribution from Tier 2 and 3 cities comprises of nearly 50% of its turnover in FY2012. It hopes to maintain a similar ratio in the future as well, but that's not necessarily the industry's view. Canon, for instance, confirms that it would like to stay with the metros for now. The company, which has up to 400 primary channel partners, 14 national retail chain partners and close to 6000 secondary retail points, is going to customers directly as well. Other camera companies are playing catch up.

So when it comes to sheer reach and brand presence, Sony seems pretty unshakeable in the short term and should gain the most. However, considering the low penetration in the market, the other players have to keep in mind that they still have a huge addressable audience that even Sony hasn't been able to tap so far, and is there for the taking. Being a slowdown phase, this is the time to do severe price undercutting and grab market share, even if it means that they have to bleed on their balance sheets to an extent, because the momentum they can gain will benefit them in an upturn. Innovation is good, but the times demand that these players ensure a greater play with low priced products, since most of the market is looking for their first cameras and would be more keen on the right bargain. And if they have to pilot test this approach, the most relevant time for the same is now!