Kodak focuses on Indonesia exposure to overtake market
Kodak focuses on Indonesia exposure to overtake market
JAKARTA (Reuters): When the Indonesian economy crashed in
1997, overseas investors bailed out in droves or pulled down the
shutters on business plans.
But for Pallop Santiphant, general manager of Kodak
(Singapore) Pte Ltd's representative office in Jakarta, something
went click.
He saw the big picture, opportunity in crisis and took a
gamble to gain market share.
The company is now poised to launch a grand plan to overtake
the market leader in Indonesia, Fuji Photo Film Co Ltd.
"During the crisis everybody tried to spend less, but we
looked at it (and thought) if we do not do anything the industry
will dry out ... so, we launched programmed," Santiphant told
Reuters on Friday.
Under his direction, Kodak spent aggressively on advertising
and promotions to boost market share while chief competitors --
Fuji and Konica Corp -- put plans on hold.
It was a risky move for the Rochester, New York-based company
to take.
After the rupiah slumped, the country's film market shrunk
about 50 percent from close to 35 million rolls per year before
the crisis. This year it is expected to be around 24 million
rolls, Santiphant said.
Indonesia's "burn rate" -- or the average number of rolls of
film used per camera per year in each of its 10 million camera
owning households -- dropped to 2.5-3.0 from 4.0-5.0.
"Most people said during the crisis that if you can maintain
share, maintain loyalty that's great. But for us, I said, no, an
opportunity is there," he said.
"Once the country faced crisis, we gained share."
Kodak's market share -- for consumer and professional products
-- has risen to nearly 30 percent now from about 10 percent in
1997.
In the same time, the number of Kodak Express developing shops
has more than quadrupled from less than 100 to more than 400
around the archipelago and sales volume has grown between 60-70
percent since pre-crisis levels in 1997.
Later this year, Kodak in Jakarta will roll out what
Santiphant calls "The Grand Plan" -- a blueprint for overtaking
Fuji.
Without disclosing details of the plan, which he considers so
secret he keeps it under lock and key at home and never works on
it at the office, Santiphant said it aims to raise Kodak's
consumer market share to more than 40 percent by the end of 2004.
He would not say what Kodak planned to spend on the program
other than it was "big".
Given political and economic ups and down the country has
experienced since 1997, Santiphant said it is hard to predict
when the Indonesian market would reach its potential.
"There are so many points that we have to overcome."
But with a population of more than 210 million and over 50
million households, Kodak is hoping for the best.
"Once the economy becomes stable and improves, it means the
burn rate might go up to three or four or five rolls per annum,"
Santiphant said.
If the number of households with cameras grows to 30 million,
or 60 percent of the total -- which is not an unreasonable target
given that Asia's best performing film markets, Thailand and the
Philippines, have comparable levels -- the market would grow to
120 million rolls per year.
"The opportunity is big here... For Indonesia we have to wait
for a while and we have to prepare ourselves for when the time
comes," he said.
"I personally believe that Indonesia is the bright market for
Kodak."