"Canon has 35% revenue increase", says Kensaku Konishi

Kensaku Konishi, president and CEO of Canon India is quite forthright with Alok Singh about Canon's growth structure and plans for POD, installations in tier-A and tier-B cities and Oce alliance

26 Apr 2013 | By Alok Singh

Alok Singh (AS): Canon India’s four years under your leadership has been the best for Canon in the world. What is your success mantra?
Kensaku Konishi (KK): In the last four years, Canon India has enjoyed a 35% revenue increase every year, thanks mainly to the growth of the economy in India as well as the fact that we are very focused to set up a service network across India to garner the confidence of our customers, especially in the enterprise as well as professional segment.
AS: In 2010, Canon India touched a growth of 49% with revenues of Rs 1,257-cr. What has been the share and contribution of production graphics arts (PGA) segment?
KK: Production and printing divison (PPD) is a new domain for Canon India. Therefore the revenue contribution of PPD is honestly not big at this moment. However, the growth ratio in PPD is much higher than our company average. This is our symbol to represent state-of-the-art technology as well as good service support. From this point of view, the scope of PPD is getting bigger and better.
AS: "Digital complements offset rather than competes," is now an established fact. Your comment.
KK: We have always believed in the above statement. The technology development on the digital side is progressing rapidly to achieve higher print runs economics year-on-year. However, the technology on the offset end is also progressing to handle shorter run lengths. 
AS: What is your experience with offset printers?
KK: The offset printers are realising the fact that unless and until they have both the capabilities, they can’t fulfil the comprehensive printing requirement of their end-customers and more crucially would be unable to, in the true sense, add value to them. The offset/commercial print segment is one of the crucial growth segments for Canon in India.
AS: What is your personal view and experience with your existing Canon PGA customers across India? 
KK: Our customers are our strength, and they motivate us to do more. They are exemplary examples of how with, Canon’s technology and support, a customer can explore the true potential of digital printing. 

AS: How do you leverage this strength for future business generation? 
KK: Word-of-mouth marketing plays a very important role in the sales cycle of a production equipment, and thus it is imperative to have highly satisfied customers. We encourage customer feedback in a structured manner, and the information consequently gathered, is used proactively for improved processes within Canon.

AS: Today, a matured print service provider (PSP) is looking for diversification. In this sense, digital seems to be the buzz word? 
KK: Yes, PSPs have been the early adopters of digital technology. Canon has been able to garner a commanding market share in the 50ppm plus colour segment in the last couple of years. 
AS: How will Canon build a market for its digital production printing equipment and extend its portfolio along with Oce? 
KK: The Oce products not only complement our product range but also open up new segments like transactional printing and on-demand book publishing. Oce has been synonymous with market leadership in these segments, and we intend to leverage this in India as well.

AS: Having said this, what is the current installed base of Canon digital production printers across India? Can you share the break-up of installations in tier-A and tier-B cities?
KK: We have an installed base of 125 plus production printing equipment. At this point, we are operating in 15 cities and these are either tier-A and tier-B class cities. 
AS: You have been visiting and interacting with the PSPs across India. How are these printers harnessing the Canon digital engines? Their outlook ...
KK: The PSPs can be broadly categorised into two segments. One segment just prints and hands out the printed matter on required media. The second segment adds value to the print by looking at conceptualising products, printing them and finally readying the print to the desired finished goods like coffee-table books, invitations, menus, danglers, point of sales advertising among others.
AS: What are the key trends?
KK: There are various applications that are gaining ground with these printers, of which, customisation, is the most evident. The trend which is emerging is, decentralised printing. Earlier, large cities were getting accumulated print volumes from suburban towns and up-country locations. With light production segment machines available at cheaper prices, new print clusters are getting developed in these areas.
AS: Photo and wedding albums segment of the print industry is picking up. Given the fact that these are entirely printed on digital and not offset, how do you see this segment and opportunity in driving sales for Canon presses?
KK: The photo and wedding album segment in India is dominated by professional photography. The amateur or consumer segment has really not shaped up yet as compared to European countries. Canon aims to address this segment in 2012 with the launch of a product called DreamLabo 5000, which is designed and developed by Canon to cater to this growing segment alone. It is a revolutionary product from the Canon R&D which is at least a generation ahead of its nearest competitors today.

AS: We feel that there should be an enhanced dialogue between the PSPs and print buyers. What is your opinion? 
KK: At Canon, it is our philosophy that any strategy which is based on taking your existing consumers into account, would always lead to a positive and win-win situation. Thus, we would ideally like to encourage the PSPs to meet with their customers and look at their pain points in their printing and address them with suitable solutions. Furthermore, the PSP could utilise this opportunity to update the customer on some of the best practices. They have seen other customers adopt and reap the benefits and also update them on the latest trends and technologies available in India.
AS: An existing PSP views digital printing boosting his profile along with a balance with offset printing. How do you see this?
KK: With both the options in place, it gives a whole lot of flexibility to the printers to produce the job in a cost-effective manner and thus ensuring they retain their profits in a highly competitive scenario. Depending upon the end product requirement by their customers, for example, even in case of a designated print job for digital printing, like customisation where maybe the name and addresses are the variable data and the remaining content is static. They can print the static content on offset and variable on digital, thus helping printer to satisfy the buyer and making margins for themselves.
AS: Print-on-demand (POD) has permeated the minds of PSPs. Do you see this imminent and looming with publishing printing opportunities?
KK: POD book publishing is another emerging business opportunity for PSPs. There are many factors behind the emergence of POD, which are: increasing trends of eBooks, number of titles increasing at a very rapid phase, inventory costs are increasing, the cost of logistics is ever rising and managing out of print books. However, as more and more publishers are shifting to POD due to these crucial factors, the print volumes on digital are increasing. Therefore, the PSPs need to invest in infrastructure not only to handle such large-volume printing, but also in finishing equipment as the end product to be delivered is not loose print but a finished book. As more and more publishers shift to POD, the volumes are going to grow even further and there exists export opportunities to nearby countries that are also opening themselves up to the Indian printers.
AS: Oce has been bullish about the Asian digital market led by India and Canon witnessing an exponential growth in India. How is the marriage getting along?
KK: The Oce and Canon collaboration has just started since the beginning of 2011. We have very successfully learned the culture of technology and marketing together. Therefore, we are still in the preparation stage to take-off. We do believe that the true synergies of this collaboration may be realised next year onwards.