Introduction
Fujifilm Holdings Corporation, often referred to simply as Fujifilm or Fuji, is a renowned Japanese multinational conglomerate headquartered in Tokyo. Originally focused on manufacturing photographic films, the company has since diversified its portfolio to encompass a broad range of industries. Today, Fujifilm operates across various sectors including photography, optics, office and medical electronics, biotechnology, and chemicals. Its extensive product lineup includes document solutions, medical imaging and diagnostics equipment, cosmetics, pharmaceutical drugs, regenerative medicine, stem cells, biologics manufacturing, magnetic tape data storage, optical films for flat-panel displays, optical devices, photocopiers and printers, digital cameras, color films, color paper, photofinishing, and graphic arts equipment and materials.
Fujifilm is affiliated with the Sumitomo Mitsui Financial Group financial conglomerate (keiretsu). Notable subsidiaries include Fuji Xerox, which transitioned from a joint venture with Xerox Corporation to a wholly owned subsidiary of Fujifilm in 2019 and officially rebranded as Fujifilm Business Innovation Corporation in 2021. Additionally, the acquisition of Sericol Ltd., a UK-based printing ink company specializing in screen, narrow web, and digital print technologies, further expanded Fujifilm's presence in the printing industry.
In Mexico, Fujifilm has been distributing its products since 1934 through its subsidiary, Fujifilm de México, which has received recognition as one of The Best Mexican Companies from 2012 to 2015.
Fujifilm is also actively involved in the pharmaceutical sector and contract manufacturing through subsidiaries like Fujifilm Toyama Chemical and Fujifilm Diosynth Biotechnologies. However, as the chief executive Naoki Hama revealed in an exclusive interview, the company is considering bringing mid-end printers to India to expand its presence in a market that it is "fully committed" to.
The Indian Market: A Land of Opportunities
Hama emphasized the immense potential of the Indian market, citing the country's large population and steady GDP growth as the primary factors attracting Fujifilm Business Innovation. "The world over, right now, all eyes are on India," he said, adding that the company entered the Indian market primarily due to its huge population and steadily growing economy.
Furthermore, Hama highlighted the importance of India's talent pool, stating that the company looks forward to leveraging the support and cooperation offered by the Indian human resources talent as it expands its business in the country.
In an interview excerpt, Hama elaborated:
"It's a well-known fact that India is a very populous country. And as you also rightly mentioned that the GDP has been showing steady growth. So from that perspective, I do believe that India is probably the country with the most potential in the world. So, I would say primarily for us India has two points of attraction - one of course goes without saying that it's a very large market, it is a market that is also growing. Other than that, it's the human resource, the talent pool that India possesses, you know, we will need the cooperation and support that is offered by the Indian human resource talent. And that is going to be very important as we expand our business over here. So, this is something we not only have expectations of, but also look forward to as we grow in India."
Competitive Landscape: Carving a Niche
Acknowledging the highly competitive nature of the Indian market, with established players like Canon and HP already having a strong presence, Hama emphasized the company's strategy of bringing specialized products to the Indian consumer.
"We would like to bring very specialized products into the Indian market, we have to bring products that make the Indian consumer happy and also to be able to contribute in some way to their life,"
he said.
In the interview, Hama further elaborated on this strategy:
"We would like to bring very specialized products into the Indian market, we have to bring products that make the Indian consumer happy and also to be able to contribute in some way to their life. I believe that the Indian consumer, for example, is very fond of photographs. I believe that business potential is very big, and we want to make sure that if your consumer wants to see a print of their photographs, they should be very, very high quality. So, we started with high-end machines that are good for high-end printing. So, this is firstly what we started in India."
Tapping into the Consumer Segment
While Fujifilm Business Innovation's focus has primarily been on the B2B segment, Hama recognized the potential in the consumer market, particularly in the area of photography. He cited the Indian consumer's fondness for photographs and the potential demand for high-quality prints, especially in the context of weddings, which are a significant business in India.
"So, we started with high-end machines that are good for high-end printing. So, this is firstly what we started in India,"
Hama stated, indicating the company's initial strategy of targeting the high-end consumer segment with its advanced printing solutions.
When asked about areas beyond weddings that could stimulate growth in the consumer segment, Hama acknowledged the declining demand for traditional commercial printing due to digitization but emphasized the company's focus on introducing high-end printing machines with expanded color possibilities to cater to the evolving needs of the commercial printing industry.
"So, returning to commercial printing, honestly, the demand for it is diminishing in certain sectors. What used to be considered commercial printing before is now transitioning to digitization. We've observed that the proportion of digitization currently stands at 10%, and we anticipate this trend will continue to grow. Therefore, in our approach to commercial printing, we have chosen to introduce high-end printing machines to India. Typically, there are four primary colors, or let's say five primary colors, provided in our printers. However, the product we have introduced in India utilizes six primary colors, significantly expanding the possibilities of permutations and combinations. Our aim is to bring high-end products into the commercial printing industry."
Embracing Digitization and Sustainability
Hama acknowledged the global trend towards digitization and the declining demand for traditional commercial printing in certain sectors. To address this, the company has introduced high-end printing machines in India that offer expanded color possibilities, catering to the evolving needs of the commercial printing industry.
Moreover, Fujifilm Business Innovation is cognizant of the growing concerns around sustainability and the need to conserve paper. Hama emphasized the company's commitment to environmental consciousness, with plans to implement eco-friendly practices in India, such as refurbishing old machines for reuse and reusing a significant portion of parts from dismantled machines.
In response to a question about sustainability concerns and the shift towards digitization, Hama acknowledged the changing landscape and outlined the company's approach:
"Your observation is absolutely right. And I think everything has accelerated, especially during and after COVID. As you know, the workstyle has undergone a lot of change, and people have become very conscious about trying not to use paper and not taking out that many printouts either. So, yes, the situation and the conditions have changed. From that perspective, I'd like to also inform you that less than 70% of our turnover or revenues come from printers, which we actually call multifunction printers, and more than 30% comes from service and solutions. We do have a business plan henceforth to increase the proportion of revenue from services and solutions."
He further elaborated on the evolving role of multifunction printers:
"One more thing to add here is I believe that the positioning of what is called a multifunction printer has changed over time, and we will need to make sure that our machines, the products that we manufacture, are conscious of this new positioning of the product. Just to give you an example of how we are trying to be conscious of the changing position of printers, etc. Traditionally these multifunction printers had two jobs: they would either take a photocopy or print out, that was mainly the situation.
However, today multifunction printers have evolved into being the entry and exit points for providing various services and solutions. A very simple basic example of that is that one of the activities that has been carried out in our efforts to digitize is that something that was physically available, like paper, is scanned and turned into digital data, right? So this is, in a sense, an entry point of providing further solutions. We believe that we have to now look at these multifunction printers as a part of the solution and services business. As such, it is one part of the solution and services. And we accordingly design our product keeping in mind that."
Diversification and Services Expansion
While printers currently account for around 70% of Fujifilm Business Innovation's revenue, the company recognizes the importance of diversifying its offerings. Hama expressed the company's intention to increase the proportion of revenue from services and solutions, which currently stands at over 30%.
"We do have a business plan henceforth to increase the proportion of revenue from services and solutions,"
he stated, indicating the company's strategic shift towards a more service-oriented model.
Cybersecurity and Cloud Integration
Recognizing the importance of cloud and data security in the digital age, Hama highlighted the company's existing expertise in these areas. Fujifilm Business Innovation already provides services such as setting up secure IT environments, configuring PC settings, and managing cloud data through a joint venture company in Japan. Hama expressed the company's aspiration to offer similar services in India as it evolves into a company that goes beyond mere data capture.
In response to a question about cloud and data security concerns, Hama affirmed:
"Yes, we are indeed undertaking such tasks. What we are doing involves setting up the IT environment for our customers in Japan. Additionally, we assure the security of their office environment. For this purpose, we handle tasks such as configuring PC settings, among others. Moreover, we have a joint venture company in Japan that manages cloud data. These are the services we already provide in Japan. Thus, in that sense, we are moving towards expanding or evolving into a company that looks beyond capturing data. Hopefully, someday we will be able to offer similar services in India as well."
Talent Acquisition and "Make in India" Initiative
On the talent acquisition front, Hama acknowledged the company's current
offshore activities, leveraging development support from Indian companies for IT and solution development. Additionally, one of Fujifilm Business Innovation's associated companies has established an HR department in India, deploying Indian software engineers for support in various locations.
Regarding the "Make in India" initiative, Hama stated that while the company currently has no specific plans for manufacturing locations in India, the country's appeal as a market and its strategic importance as a gateway to Africa cannot be overlooked. As the company's sales growth in the region increases, the possibility of establishing manufacturing facilities in India may be explored.
Hama's comments on these aspects are as follows:
"Firstly, I'd like to address whether we are pursuing innovation in India. At present, we engage in offshore activities, leveraging development support provided by Indian companies for IT and solution development. We already offshore some of our software development through these means. Additionally, one of our associated companies has established an HR department in India, deploying Indian software engineers for support. Depending on the circumstances, they may work with us in Australia. Cooperation from our Indian partners is vital for our expansion efforts.
Regarding "Make in India," we currently have no specific plans for manufacturing locations. However, India's appeal as a market is undeniable, and we will monitor our sales growth in the region. India also serves as a gateway to Africa, enhancing its strategic importance."
Hama further highlighted the company's commitment to environmental consciousness and the implementation of eco-friendly practices in India:
"Our commitment to environmental consciousness sets us apart. We endeavor to implement similar eco-friendly practices in India. In terms of environmental initiatives, we engage in two types of business. One involves refurbishing old machines for reuse, while the other entails complete dismantling, with 86% of parts reused and 14% replaced with new ones. This latter approach, particularly reusing mostly new parts, showcases our dedication to sustainable practices. We have implemented these initiatives in Japan and hope to introduce them to the Indian market, given the close ties between our nations."
When asked about specific plans for establishing manufacturing facilities or increasing investments in India, Hama acknowledged the lack of concrete plans at the moment but expressed optimism for the future:
"So honestly, we do not have anything specific yet. I have no direct answer to your question. That said, you know, once you enter India, I do have something deep inside, in the back of my mind. I know that I must have that concept in my head. And you know, I hope that very soon there will be a time when I will start thinking specifically along those lines."
Conclusion
Fujifilm Business Innovation's strategic approach to the Indian market reflects a careful balance between catering to the evolving consumer demands, embracing sustainability and digitization, and diversifying its offerings. With a focus on specialized high-end products, an expanding services portfolio, and a commitment to environmental consciousness, the company appears poised to navigate the competitive Indian market landscape. As the company's business grows in the region, the prospects of increased talent acquisition, innovation collaborations, and potential manufacturing investments in India remain open for exploration, albeit without concrete plans at the moment.
The interview with Naoki Hama provides valuable insights into the company's vision and strategy for the Indian market, highlighting the opportunities and challenges it faces. By leveraging India's talent pool, adapting to changing market dynamics, and embracing sustainable practices, Fujifilm Business Innovation aims to establish a strong presence and contribute to the Indian society's overall well-being.
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