After it raised the red flag against online retailers and advised customers against buying its products from unauthorised online sellers, Canon India has now decided to discontinue with the online sales of its cameras but will keep selling its printers through the e-commerce platform, if the e-tailers are its authorised dealers.
?We are not comfortable with online sales of our cameras as photography is an experience best felt through touch and feel. Online is not our focussed channel of sale for cameras. We cannot take a risk with unauthorised website dealers when it comes to the camera business,? said Alok Bharadwaj, executive vice-president, Canon India.
Explaining that this demarcation has been done because many dealers have said no to stocking Canon cameras because of price disruptions by online players, Bharadwaj added that the dealers invest in showrooms and need their 10-15% margins which might plummet due to steep discounts offered by online retailers.
Canon India has over 100 exclusive brand retail stores called Canon Image Square and targets to take the count to 300 stores by the end of 2014. Canon India clocked in revenues of R1,910 crore in 2013 and gets 46% of its business from selling cameras.
Printer sales are peripheral and piggyback on the sales of laptops and personal computers and do not require the ambience of a showroom to get an experience like photography.
?Our dealers may shift to stocking products like smartphones if their profits plummet because of predatory pricing by companies like Flipkart and Snapdeal. We can’t do anything more than demarcate authorised dealers from others because the e-tailers can buy our products from any dealer or distributor and sell them cheap,? Bharadwaj added.
However, the company has ruled out longer warranties for products bought offline to negate the impact as it is difficult to identify the serial number of products bought online because often the e-tailers buy products from offline dealers and sell them online.
According to a Crisil report, the impact of online retail is most evident in segments where the product specifications are standard and differentiation low, such as books, music and electronics. ?Unable to match the discou-nts offered by online retailers, traditional booksellers and music stores are either shuttering outl-ets or folding up. For example, Pl-anetM, a part of Videocon-owned Next Retail, has been closing stores since 2012,? the report says.
Canon India is also planning to work with its authorised online sellers to guide customers on pricing and product availability fronts.
