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Grey market for digital cameras may bite the dust soon
September, 21st 2011

Grey markets for digital cameras may soon become a thing of past, feel the imaging majors in India. "It is certainly the year of demise for grey market in compact category, and the sun will set soon in DSLR (Digital Single Lens Reflex) segment," said Alok Bharadwaj, senior V-P, Canon India.

Though being an unorganized sector, it is spread in many metro cities, like in Kolkata, at Metro Galli, Kidderpore, and in Delhi, at Pallika Bazar.

"Earlier, Nikon's competition was Nikon grey but now the scenario has changed and grey market has shrunk a lot. Its no more a cause for concern," said Sajjan Kumar, GM, imaging, Nikon India.

According to Bharadwaj, the grey market in the country is mostly activated in DSLR segment and it's roughly around Rs 250 crore, but since India is the main focus for all the global camera majors and as a consequence of that, the market is also increasing rapidly, which is ultimately causing the death of grey market.

"The general trend amongst consumers is to buy expensive lenses and camera bodies from the grey market at a cheaper rate, but now with most of the players providing the product at a place nearby them, with an extended guarantee period and free memory cards, people are ready to buy it from us officially," said Kumar.

"More awareness among the consumers and round-the-clock marketing have also stepped up the chances to diminish the grey market," said Hiroshi Takashina, MD, Nikon India.

It may be noted that Nikon India has recently doubled its marketing expenditure to Rs 120 crore from last year's Rs 60 crore.

Another common feeling amongst the leading camera players is, if government reduces tax on the DSLR bodies, lens, accessories, then the process of erasing grey market will be rapid. "Currently, the basic duty on lenses and accessories is still at 10%, which makes it a little difficult for us to bring DSLR prices further down, despite a phenomenal growth in the sector," said a top official of Olympus India. Currently only 1% of Olympus India's sales is affected by grey market.

"The Comprehensive Economic Partnership Agreement (CEPA) will benefit us surely to cut the excessive costing," feels Bharadwaj. It may be noted that India and Japan have signed the CEPA Act, under which both the countries will enjoy some trade benefits during the bilateral trade.

According to Takashina, India is a price conscious market where 75% of the sales are in the category of cameras priced below Rs10,000, so with more shopping shop concept and 24 hour customer care backup, it is now more sensible for a customer to buy the gear from official dealers than to go and buy it from the grey market.

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