Canon reacts to JB’s move to grey

Canon Australia has openly expressed disappointment in JB Hi-Fi’s move to establish a ‘direct import’ channel for Canon products, and says it will closely watch for – and react to – any impacts on local  sales.

Jason McLean, director, Consumer Imaging, Canon Australia

Canon provided Photo Counter with the following written statement:

‘Naturally we are disappointed that JB Hi-Fi has launched a direct import channel, which in our mind changes them from a pure local-based retailer to a local/grey-market ‘hybrid’ operator.

‘JB Hi-Fi is a key Canon customer and any changes in our local sales results that this brings about will see us having to re-direct our customer focus and support.

‘Canon Australia’s purpose as always is to drive value and support locally, and we will continue to work closely with our key customers to do this and deliver our local business targets together.

Jason McLean, Canon Australia’s director, Consumer Imaging, made himself available following the statement for a brief interview in which he noted that JB’s move was potentially a gamechanger:

‘Depending on what happens in the market – whether others follow, as every customer makes their own choice – it basically has the potential to change the whole retail landscape here in Australia,’ he said.

‘As a supplier who has got a lot of vested interest – we’ll just have to adapt to that as quick as we possibly can.

‘Because of their profile, people will have a look at what they are doing.’

Mr McLean said that JB is now a unique category of customer for Canon.

‘We are disappointed, as we’ve said upfront. It’s changed the model. While all our trading agreements have traditionally been with local -based customers, this is a completely different model, so it changes the way we even look at our trading agreements.

‘Our focus is on the local market and what we can do in the local market. We recognise that the world is changing, but our job is to deliver a local result and that’s what we will continue to do with the customers who want to do that more locally with us.

‘At this stage we don’t know what this move is going to do to our local business, but we have to deliver a local volume or sales value here, and if this move means that JB’s business mix changes to more international than local, then we will have to move support to other customers to make up the shortfall which this may or may not cause.

He said that JB was ‘definitely’ currently among Canon’s top 5 customers in the Australian market.

‘Any impact this has will be able to be measured pretty quickly.’

On the curious situation whereby one section of the JB website is actually competing with another on price, Mr McLean observed, ‘That’s how they set it up so they will have to manage that, wont they?’

He would not be drawn on comments from Terry Smart, JB’s CEO, that the retailer had made the move into the grey market to protect the JB brand, but agreed that one interpretation could be that JB was reacting to the entry of Kogan into the grey market for cameras.

‘That would be my interpretation but I don’t know that for a fact. I’m only reading the same comments you’re reading and making assumptions.

Mr McLean said that one positive in the way JB has approached the move to sell both local and direct import stock was that the company has been quite open in highlighting the differences between the two options.

Thyey’ve made a fair bit of effort to try to explain to the consumer the difference between buying overseas and what that means …they seem to have gone out of their way to set out the difference.

‘That’s quite interesting. And if you read some of his [Terry Smart’s] commentary as well, the inference is current competitors who do this do not make things very clear for consumers.

‘It looks like they are trying to encourage competitors to be as open and transparent as they are.’

No anonymous comments from Canon

Mr McLean concluded the interview with an objection to comments quoted in another trade website attributed to an ‘unnamed Canon executive’ which also claimed Canon was unwilling to make comments on the record on the issue.

‘None of our executives, and that’s me included, would behave that way,’ he said. ‘If we are going to comment we would always be on the record and upfront.

‘Just because we choose not to deal directly with some trade journalists doesn’t mean we make comments off the record.’

‘Whenever we talk to anybody we talk on the record with a named spokesperson.

‘We were never contacted by that publication and no-one that actually has operational responsibilities in our business would make comments off the record or unnamed.

The only trade website which attributed comments to un-named Canon executives last week was Channel News.

It’s in the public record – but we don’t stand by it,’ he said.


7 thoughts on “Canon reacts to JB’s move to grey

  1. Love the veiled threat to JB about redirecting resources. Perhaps Canon Australia should think twice before putting the hard word on JB. If JB is successful with the grey market channel surely other retailers will have no choice but to follow. i

  2. Thats a pretty weak response by Canon.
    JB cannot have it both ways.
    They are benefiting from Canon’s Australian marketing, sponsorship and promotional activities, and choose to buy outside the very channel who funds it. Stop supply. Simple solution.

  3. Just a word in defence of Canon here: First, they have shown considerable courage and leadership in making any kind of statement at all. Nikon has simply ducked for cover. It doesn’t seem fair to knock a company for being a little equivocal in criticising its (perhaps ‘ex’) major customer. There are also legal implications in making an agressive public statement on the issue of supply. Let’s wait and see, and judge Canon – and the far more taciturn Nikon, for that matter – by what they do, rather than what they say. As Jason McLean noted, it won’t take very long for a shortfall in sales to show up if this move by JB is successful.
    JB reminds me of a partner in a marriage who has informed the other party they have decided unilaterally that the marriage is to be an ‘open’ one from now on. Under these circumstances, it’s up to Canon to decide whether there’s any kind of partnership at all!

  4. For the continued strength of the speciality market here in Australia i hope that Canon succeeds in its quest to bring JB back into the fold – but the cynic in me thinks this is a ploy to get Canon to reduce JB’s wholesale price. Ttime will tell ..Come on Nikon, your move…

    • Robbo do you not think that the strength of the specialty market would be better served by Canon having attractive wholesale pricing across their whole range of kit? Not just selected DSLR’s a few lenses and their p&s’s. Scratch the surface and the accessories, etc, are nearly double the US pricing. JB are being shopped and losing sales to the online retailers. They are sending a message to Canon and Nikon etc. for the whole industry. Good on them for having the guts to do it.

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