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Japan Inc and Australian photo retailing

The following opinion piece was contributed by a regular reader. Name withheld on request: 

With difficult trading conditions throughout Australia – and even harder times for fast-fading
local manufacturing – we are all so engrossed in finding our own solutions and restructuring, that we might just be overlooking the biggest threat of all as it relates to the photo business.

font-(3) It may be just over the horizon but then again, so are mirages, so who knows! And that threat could come from Japan itself. That great bastion of manufacturing, innovation and high quality products, is inching ever so much closer to the fiscal cliff – a cliff many times higher and more dangerous to the world economy than the one Greece fell over.

Somehow, we have been all so awed over time by Japan’s growth and apparent stability since the Second World War that it is easy to overlook how far that mighty country has fallen from a pinnacle of being the second most powerful nation on earth in a financial sense not so long ago, to a nation struggling to keep its head above water.

The closing down of 50 of its 52 nuclear plants after the Fukishima disaster (which is on-going) and the huge added costs of buying in alternative fuels to run the country has brought the potential for real crisis even closer.

font-(2)It just doesn’t make the news. The reality is that Japan is in deep trouble; financially, structurally and politically, and it would not take much nudging for this great country to fall, screaming, over the fiscal cliff with enormous ramifications for the world, but certainly for the Australian economy and the Australian photo industry.

But what of the photo business if it all hits the fan in Japan? Difficult to say really, but when
you look at Sony, Panasonic and Sharp for example, these mighty brands are in great
difficulties, juggling huge losses, selling assets, trimming staff and taking in partners
(Korea’s Samsung now owns 3 percent of Sharp, for example), but haven’t been able to stem the bleeding.

The big photo brands aren’t saying much, but clearly they would be alarmed by the trends
and the mess that their markets are in – the plummeting compact market, the lack of innovation (contrasted with Go-Pro action cameras, Lytro light field cameras, the latest smartphone cameras, and even the Samsung Galaxy ‘internet camera’), the very low sales in video cameras, the lack of orderly marketing so that some level of margin exists again at all levels, the increasing value of the yen, and a dozen other points that could be made.

Who knows, we might be looking at more amalgamations, closures and less product innovation – possibly less range – somewhere up the road.

font-(1)It is worth keeping a close eye on it all and structuring your photo business so that it is less reliant on hardware as the core of your operation, if for no other reason than the big brands
have also managed to savage margins to the point where sometimes it is hardly worth it all.

The only thing we are certain of is that the world changes, and when it changes, it often does so ferociously quickly, and there is never any sympathy for those who are not prepared.

In a nutshell, photo dealers – those that remain – should use strategies to develop profit centres not so reliant on Japanese cameras and a throughput volume model that is simply not sustainable.

One Comment

  1. Ron Frank Ron Frank March 15, 2013

    Well written article and accurate in what it says look at what is left of the giant German photo manufacturing industry all those long gone companies, Voightlander, Exacta, Plauble, Rollei, Frandie & Heidei, Liesgang, Rollop, Jager-Le-Coultre, Rowie, Shianski, Exa, Agfa, Perutz,
    Bauer,Eumig, Nizo, Braun, Kodak, Kinderman, are but a few of the companies that no longer manufacture or in some cases exist. Then there was English, French, Austrian, American and even a few in Australia all have become dinosaurs. The new wave of gear makers are Chinese, Indian, Taiwanese with a few of the diehards left in the old world. We must not become dinosaurs and need to change our profit centers as straight selling gear has lost its appeal with internet and oppressive new laws for retailing, merchandising, and employing staff all taking a toll.
    Trading with intelligence is the new order and get used to it or perish
    Ron Frank

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