CANON SOUTH AFRICA: Canon Combines Pioneering Products with Perfect Partnerships

David Preston, MD of Canon South Africa, is clear in his vision for the company going forward. Since arriving from Canon Europe in early 2020, he has pushed an agenda of change, bringing about a modern, digital, technology-driven organisation that can cater for the needs of customers across sub-Saharan Africa.

Canon is a leading global technology company with a focus on imaging. Established in Japan in 1937, the company has become an international powerhouse with operations across all continents, driving innovation like few others.

In South Africa, the company was established in 2000, taking advantage of strong brand recognition. For some time, the Canon brand had been imported and distributed through local partners. But a quickly growing market, driven by demand for premier quality cameras and lenses, saw HQ call for a formal presence.

“That is when we transitioned from a distributor model to a Canon-owned entity,” says Preston, a Canon veteran of more than 25 years.

A combination of drastically improved image quality, greater convenience, and the early rise of social media saw the digital camera market boom. Canon South Africa was a pioneer in the mirrorless camera market, and its office equipment offering also gathered pace. From 2002, for the next decade, the business grew significantly, becoming one of the most important businesses within its segment – the Developing Regions Business Group (DRBG). The likes of the EOS R5 and the R3 have positioned the company as the innovator of choice for photographers in the both the professional and hobbyist space.

Today, Canon South Africa is home to 180 people, based in a state-of-the-art premises in Pretoria. Key products include cameras (photo and video), lenses, office printing equipment, and industrial printing solutions. Because of its valuable range and strategic position, the SA operation also caters for export across sub-Saharan Africa, either exporting directly to clients or working alongside local distributors.

“We’ve been through a lot as an organisation,” says Preston. “I came here as the business had not changed much in the 20 years since its inception. We have changed our physical location, we have completely refurbished, we have a new warehouse, we have new logistics provider, we have a new ERP system, we had the lockdowns etc. It underlines Canon’s commitment to the whole continent of Africa. We have invested heavily in people and technology to ensure our customers get exactly what they require.”

NEW FINANCING OPTION

In September, Canon announced a new partnership that would help to offer accessibility to products at the top end of the market. Industrial printing, where machines run aggressive work programmes and represent significant capital outlays, can now be leased through an arrangement with Canon, Merchant West, and the end user.

After displaying at the major druper professional printing exhibition in Germany in May, interest in Canon’s high-end equipment has soared.

“We launched a number of inkjet and laser engines and they have been extremely well received by commercial printers around the world,” says Preston. “That has had a big impact on our business in South Africa this year and will continue as new products come online next year in the labelling and packaging industry, which we see as a big opportunity in SA.”

The arrangement with Merchant West sees Canon able to offer products on a lease basis, with monthly instalments rather than major payouts. All the local requirements around partnership, and financing regulation are taken care of by Merchant West, and Canon expects to solve a problem for clients around cash flow and having access to equipment with minimal operational disruption.

“In SA there is a strong leasing mentality,” Preston details. “Financially, SA is a very mature market in terms of products on offer to business and consumers. We felt that, in order to meet the growing demands of the professional print market, it would be useful to have a finance product that enables access to some of our larger products which are in the millions of Rand. The financial proposition that sits behind the product needs to be a strong one so that when companies account for the acquisition of the product it all makes sense.

“We went to the market to provide a partner who we could rely on to provide all for the financial security required for customers as well as the products that met all of the compliance requirement for the industry in SA.”

Petrie Kleynscheldt, Finance Director at Canon South Africa, adds: “By offering our customers the ability to lease, we are not only aligning with global trends but also improving the overall customer experience. This partnership with Merchant West gives us the ability to offer tailored financing that meets our customers’ needs without tying up their capital.”

CLEARLY GROWING

Currently, the mindset in Canon is one of growth. The business has an extremely strong product range and enjoys leading market positions across a number of its core sectors. Preston is clear that Canon must grow in a profitable way as it looks to bolster in developed markets.

“We want to be number one but we want to do so in a profitable way,” he says. “That is driven at individual product level and each product we sell is sold profitably. Of course, we might decide to be very price competitive for a period of time, but that is not a sustainable business model for anybody.”

The photo/video market is dynamic and quickly changing, with use cases and technology vastly different from one year to the next. The market for cameras has declined inline with the rise of the smartphone but that reduction has been countered by a boom in the professional photography market. “Our mirrorless products are now aimed at that group of customers,” confirms Preston.

Video products are becoming increasingly successful as digital content is centred around this medium. “We have great products in that space. we also have great products for professional filmmaking. Whilst the volume of units has declined, the complexity in the professional market has grown, and in revenue terms it has been really good.

“Increasingly, in the professional market – the Netflix film market – our products are being used. We are launching a number of products in that very high-end market, and they will definitely have an impact at the end of this year and into next year,” Preston highlights.

With office equipment, the industry is similar. Smaller office printing solutions have declined but larger, heavy-use industrial products have become more important. Canon is number one in the office printer and professional printer space in a number of the sub-Saharan nations, but Preston is cautious with data not easy to come by. “Many consulting companies don’t measure in all countries but our local feedback suggests that, in most cases, we are number one in photo/video and office print.”

He says that the target is the number one position, in terms of market share, in every segment, in every geographic market. However, even being the market leader comes with its challenges as growth is more difficult and mainly focused on taking market share from others.

“We have seen that a number of our competitors are challenged. The environment we operate in is challenging,” explains Preston. “Canon is very strong financially and very stable, and we can continue to invest. While there is not huge growth in the market, we are always looking to take competitor share. In some of the neighbouring markets there are big opportunities in key segments.”

Growth strategy is backed by a rolling three-year plan which identifies strengths and weaknesses for the business, and offers up opportunities. This plan is addressed annually and adjusted to suit economic and commercial conditions.

“Because of the diversified nature of our product set, it means we are very strong financially and our direction is one where profit means we can invest in people, better-quality services, and better-quality marketing,” Preston says.

STRONG POSITION

Longer-term, the goal for Canon locally matches its global mantra; the Japanese word Kyosei – a philosophy which sees people live and work together to achieve a common good. In South Africa, the company has teams across consumer sales and marketing, business-to-business sales and marketing, after sales, service, finance, and business operations. By maximising the potential of these teams, and harnessing the innovation and thought-leadership that comes with being part of a global industry leader (home to more than 180,000 people), the company is perfectly placed for ongoing expansion.

“The commercial print side of our business, where we have been in the market for a number of years, will continue to generate other opportunities,” says Preston.

“On the camera side, we continue to evolve and develop a range of lenses to fit our mirrorless camera bodies. From when we launched, we now have more than 50 lenses. It’s an important development for the photo/video community and because photo and video is interchangeable, and our lenses are perfectly designed to accommodate.”

The product range is right, new financing arrangements are now in place, service teams continue to work successfully alongside clients. The proposition from Canon South Africa is, for Preston, right where it needs to be.

“The things that make up your customer proposition are a good product – that is a pre-requisite -, competitive pricing, support from a service perspective, and a return on investment for the customer – that is critical. When you put all of those things together, we are in a really strong position going forward. We have changed a lot here so it is early days, but it is very exciting,” he concludes.