Nikon’s official arrival reflects the spending habits of an increasingly brand-aware middle class
By Steve Finch
For Nikon, the past 18 months must have seemed like a post-modern rehash of the Bible’s ten plagues of Egypt. A monster tsunami struck in March last year off the coast of Sendai, home of one of its key Japanese factories. No sooner had production resumed when some of the worst Thai floods in living memory submerged the bottom floor of another key manufacturing centre in Ayutthaya.
Despite a 12% drop in operating income at Nikon’s imaging division during the second quarter, it has not all been bad news.
The Japan-based firm sold nearly a million more point-and-shoot cameras, lenses and digital SLRs between the start of April and end of June, a 15% rise on the same period last year.
In Asean, the company all but completed total coverage of the region by opening its first showroom in Phnom Penh at the end of September. Only Laos remains an untapped market, said Daren Tan, Nikon’s senior manager of business support in Singapore, Nikon’s main Asean base.
“Asean is certainly an important growth engine,” he added.
Like many multinationals that have arrived in Cambodia, for Nikon Phnom Penh represents natural sales progression.
This year, GDP growth is expected to hit around 6.5% in Cambodia, and the capital is adding about 300 new cars every month, said Tan, all signs of a country moving in the right economic direction.
“Visiting Phnom Penh month after month, I started to feel like the buzz of activity is growing,” he said.
Before Nikon teamed up with local partner HGB Trading – a Phnom Penh-based retailer of luxury cars, watches and mobile phones – Tan watched closely as grey import sales of Nikon cameras steadily grew, which was good in the shorter term but not so good for the long haul.
“Too much grey entering the market from a particular brand is like a litmus indicator,” he said. “However, this prompts a strong need to be there, directly in the market.”
Having briefly left Nikon in 2008 to work in regional sales for other multinationals including eBay, Tan rejoined the Japanese camera-maker two years later at its regional base in Singapore. He now leads what the company refers to as its ‘Nikon school’, an initiative which aims to educate consumers about its myriad cameras and lenses in the hope of forging a long-term relationship in a brand-loyal market.
Nikon users tend to stay Nikon users – in the same way arch-rival Canon users tend to buy Canon – meaning the key to market share growth is poaching customers from other brands while retaining your own. An official presence in new markets like Cambodia is critical, says Tan.
Cambodia, along with the whole of Asean, possesses a key component for technology companies: a young demographic.
In an age where the minor details of our lives are captured digitally, posted on Facebook, tweeted into the blogosphere and circulated on the internet, cameras play a key role in the centre of this increasingly profitable dynamic.
“Photography has become more than just a hobby of a niche crowd, it has become ubiquitous,” said Tan.
A key test for Nikon in Cambodia and elsewhere in emerging Asean will be competition from devices like the iPhone. In Phnom Penh, the first camera many people own is part of their smart phone.
Tan would not give an indication of how many cameras Nikon is selling in Cambodia. The grey nature of the market makes it difficult to gauge, he added.
He points to strong and rising interest across Nikon’s product range, even if top-of-the-range models sell at prices well above what the average Cambodian earns in a year, estimated at just over $2,000, according to the UN.
“Cambodia is a fast-emerging market with a strong middle-class,” said Tan. “So the product demands here in Cambodia are not very different from surrounding countries such as Vietnam and Thailand.”