Digital camera market is too small for local manufacturing, says Nikon India MD

According to Nikon’s internal estimates, 250,000 digital cameras were sold in India in FY24. Photo: Reuters
According to Nikon’s internal estimates, 250,000 digital cameras were sold in India in FY24. Photo: Reuters

Summary

  • Though the firm has been growing steadily, especially since the pandemic, Indians don’t buy enough digital cameras for Nikon to set up factories and supply chains here, said Sajjan Kumar.

New Delhi: Local manufacturing remains out of the question for camera and imaging equipment maker Nikon India, even though it expects to expand its domestic presence and cross 1,000 crore in annual revenue by the end of this fiscal.

In an interview with Mint, Sajjan Kumar, managing director of Nikon India, said despite the firm’s growth, the market is not large enough for its parent company, Tokyo-headquartered Nikon Corporation, to set up factories and supply chains in India. “All our cameras remain fully imported from other manufacturing hubs," Kumar added.

Keizo Fujii, managing director and chief regional officer for Nikon in South-East Asia, Oceania, Africa and the Middle East, added that only two of every 100 smartphone users in India also buy a dedicated digital camera. “India is an important market because of its population, but the installed base for digital cameras is not as high as it could be. That is where we see potential for growth," Fujii added.

Nikon India reported net revenue of 965 crore for FY24, Kumar said, adding that the company expects to increase this to 1,060 crore in FY25 — marking a 9.8% increase.

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Tiny but important market

“We expect the Indian camera market to add 15 million units annually in FY25, which will lead to a 6% annual increase in shipments. We also expect to grow 10% annually by volume. At present, we account for 32% of India’s camera market. Since we expect to grow at a faster pace than the rest of the industry, we expect our market share to grow, too," Kumar said.

According to Nikon’s internal estimates, 250,000 digital cameras were sold in India in FY24. Kumar added that the market could hit 265,000 units by FY25. In comparison, about 150 million smartphones are expected to be sold in FY25, meaning that the size of the digital camera market will be just 0.2% of the smartphone market by volume.By revenue, however, the digital camera market performs slightly better. Kumar said the net revenue of the digital camera market was around $375 million in FY24, or around 1% of the smartphone market’s net revenue of $39 billion.

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Though they maintained that manufacturing in India was not viable, Kumar and Fujii added that the country was strategically important for Nikon in terms of sales. “India is a unique market in comparison to Nikon’s other global markets due to its vast wedding industry. Excluding Japan and China, India accounts for 40% of Nikon Corporation’s revenue in Asia and Africa," Fujii said.

Steady growth post-pandemic

Kumar added that the size of the market and the average selling price (ASP) of digital cameras has grown steadily since the end of the pandemic. Nikon’s ASP for a camera was 100,000 ($1,200) in FY21, he said. “Today our ASP is 140,000 (nearly $1,700), and it has been growing every year. Most of the demand is for mid- to high-end cameras, driven by the need for content creators to make professional videos with cameras that have smart connectivity features. The rising ASP has meant that the value of the market has grown steadily, too, even when volume growth has not come through," he said.

“While our entry-level cameras saw a slight decline in sales, mid- to high-end cameras grew by 12% year-on-year. The pace of growth was similar in FY23 as well," he added. Nikon considers cameras priced above 100,000 to be mid-range and high-end.

Industry estimates paint a similar picture for Nikon’s competitors as well. The company’s rivals in professional digital cameras include Canon, Fujifilm and Sony. An estimate of four market research platforms by Mint showed Nikon, Canon and Sony account for more than 85% of India’s digital camera market, with Canon at the top and Nikon a close second. Sony tops the chart in terms of ASP.

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Sony, however, operates as a large electronics conglomerate in India, selling televisions, gaming consoles and audio devices as well, while Canon also operates in the peripherals space through printers.

Nikon, meanwhile, has chosen to diversify into healthcare. Kumar said, “We started operating in healthcare directly in 2022. Now, this vertical contributes 5% of our annual revenue. With the union government focusing on this sector, we expect it to ramp up further. We sell directly to healthcare research institutes, the in-vitro fertilisation industry, and hospitals. Most of the offerings are entry- to mid-range microscopes."

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