Wall Street Journal
January 15, 1999
Kodak Turns to Camera RentalsBy RASUL BAILAY
To Inspire Picture-Taking in India
Staff Reporter of THE WALL STREET JOURNAL
HOME TO THE Taj Mahal, the Himalayas and splashy festivals, India is one of the world's most photographed countries.
But Indians themselves don't take many of those pictures. Only a fraction of India's 950 million people can afford a camera.
So how do you sell film in such a poor country? Eastman Kodak Co. thinks it has the answer: Rent cameras, says Santonu Choudhury, vice president for consumer imaging at Kodak India Ltd.
Kodak is test-marketing the concept in the western city of Pune, stocking 300 groceries, stationery shops, pharmacies and telephone offices. The rent is a relative bargain at 50 rupees ($1.18) for a week, though customers have to plunk down a 500-rupee security deposit too.
To make the deal attractive, Kodak loads the Kroma point- and-shoot models with a roll of 36-exposure film. When the week -- or the roll -- is spent, renters drop off the camera where they picked it up and Kodak processes the film over night for another 300 rupees. Shop owners receive a 10% commission.
The response has been good, says Mr. Choudhury. Since kicking off the promotion in October, Kodak has rented 3,000 to 4,000 cameras a month. (Kodak has conducted similar trials in Russia and South America.)
KODAK INITIALLY had a tough time convincing Pune's mom-and-pop retailers. "Since cameras and film are available only at traditional photo shops in India, the shop owners said, 'We won't be able to market them. Nobody will expect us to have cameras,' " says Sanjeev Mehta, Kodak's South Asia business support manager. Now, though, Kodak plans to sign up 200 more Pune outlets by the middle of the year, and at the same time extend the camera-renting business to 23 other Indian cities.
"Awareness of photography is very low," says Mr. Mehta. "Indians don't place much value in preserving their memories."
In its latest consumer study, a Gallup poll in 1996 found that just 21% of all urban households and 4% of rural households own a camera. The survey also found only one in 10 respondents had shot a photograph in the previous 12 months.
No wonder, then, that demand for film in this South Asian giant is just 70 million rolls a year, compared with 200 million rolls in China, says Mr. Mehta. But the market is improving. Buoyed by free-market reforms that have given Indians more disposable income and greater opportunities for travel, India's film sales are growing 15% to 20% a year.
KODAK, THE world's biggest maker of film, is also trying to boost film sales by marketing affordable cameras. High import tariffs have kept cameras out of the masses' reach. Even after custom duties were cut to 73% from around 200% five years ago, the perception of cameras as luxury items has stuck.
"We want to debunk the myth that cameras are upmarket or elite products," says Mr. Choudhury. "We are trying to turn photography into more casual, more candid and more fun."
In October 1997, Kodak introduced its locally made KB10 camera, which sells for 995 rupees.
Kodak is playing catch-up with rival Fuji Photo Film of Japan, which says it has 40% of the Indian market for film; Japanese company Konica has 32% and Kodak 25%. (Kodak declined to give sales figures for cameras or film.) The whole market is said to be valued at seven billion rupees, or $165 million.
Fuji beat Kodak into the low-end camera market by eight months in 1997 and has managed to undercut Kodak with a Smart Shot 2 camera that retails for 750 rupees -- even though it is imported. Fuji has sold 90,000 of those cameras and 10,000 of a 1,400-rupee Smart Shot deluxe model, according to M. Matsumoto, Fuji general manager in India.
Return to "Readings in Microeconomics"