The Japan Times WORLD EYE REPORTS HUNGARY
©THE JAPAN TIMES	Saturday, October 12, 2002

The Hungarian taste for the high-end

For anybody acquainted with Hungary's tradition of scientific and technical achievement it may come as no surprise that Hungarian consumers demand the latest and most advanced technology. It is a lesson many foreign companies have learned the hard way, introducing top-end products to the Hungarian market too late in the game -- after competitors already have a foothold.

"Hungarians don't want to be sold to as though they are a developing country," says Fujifilm managing director Kazuya Ito. "They are very eager and quick to learn new technology and knowledge." Fujifilm entered the Hungarian market during the 1980s as a supplier to the then-communist government with motion picture film through the Japanese trading firm Marubeni. Fujifilm still provides motion-picture film but its current annual sales turnover of $12 million now represents a wide and balanced product portfolio that includes amateur film, professional film, color paper, cameras, digital camera, and minilabs. It provides government hospitals with X-ray film and medical equipment. Digital cameras, in particular, have proven very popular in Hungary -- growing faster than any other product segment.

Fujifilm Hungary President Kazuya Ito

Naturally, Fujfilm is best known for its traditional film products, which are sold through the ubiquitous green-white-and-red-fronted Fujifilm franchise stores. However, traditional and digital products are also increasingly sold in massive, western-style hypermarkets which have sprung up around Budapest along with the country's increased spending power.

Nonetheless, the consumption of consumer products still reflects the profile of a developing country. According to market studies by film and photography companies, Hungary uses 0.6 rolls of film per year per capita, compared to 2.5 rolls per year in Western Europe or 4.0 in the US or Japan. Furthermore, the proportion of the market able to buy such products is a smaller slice of the national population than in the West.

"Only about one-third of the population can afford to enjoy film products, so people generally take pictures solely on special occasions," explains Ito. Considering Hungary's national population of 10 million, a company like Fujifilm is dealing with a consumer customer base of just 3.3 million. This proportion is expected to rise as the economy grows.

The market in Hungary for professional photographic equipment is even smaller, but demand is also growing at a faster rate than that for most other consumer products. In Hungary, two-thirds of professional photographers use Nikon equipment.

Nikon Kft Managing Director Gyula Huller

Nikon Kft managing director Gyula Huller is in a good position to comment on the professional market. He has been with Nikon since it opened its first East European subsidiary in Hungary in 1991. Since then sales have increased at a yearly average of 30 to 40 percent. "Of course the Hungarian economy is growing very fast," says Huller. "The photographic market is also growing very rapidly. Based on our experience, the demand for high-end branded products is showing the most growth of all." For Nikon and other camera manufacturers, high-end products means mini-zoom cameras, top-end SLR (Single Lens Reflex) and digital products.

An unfortunate irony for Hungarian consumers is that: after import duties and value-added tax is added, photographic equipment in Hungary often costs more than it does in Japan and the US. But for professional photographers there is no alternative than to invest in high-end equipment.

Now that most media organizations have made the switch to digital, Huller sees a new round of sales growth in the amateur digital market. "For people who have computers and digital equipment, the investment in a digital camera is worthwhile because they will no longer have to pay processing and printing fees," he says.

The combination of rising consumer purchasing power and the move toward digital technology has set the stage for increased growth in the Hungarian photography market.

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