EXCLUSIVE: Up to 25% of all digital cameras sold in Australia are believed to be grey imported with online web sites and unauthorised distributors now selling same brand camera for up to 30% less than what an Australian retailer can sell them for.
According to several digital vendors and the CEO of Camera House, Paul Shearer, the situation is set to get worse, due to the parity of the Australian dollar with the US dollar and the refusal by several big brand camera manufacturers, including Nikon, Canon, Panasonic, JVC and Samsung to stop their overseas operations suppling distributors and retailers who are on selling intro the Australian market.
According to Paul Read the Director responsible for Panasonic’s Consumer Electronics Division the situation is “serious”.
“Online web sites that are accessing stock from overseas are selling the same products we are trying to sell at considerably cheaper prices than retailers in Australia. It’s becoming a serious issue” said Read.
Paul Shearer, CEO of Camera House, said: “Every digital camera manufacturer is concerned about the effect that cheap grey imported cameras are having on the market especially at the premium end of the digital camera market. We believe that the grey market could already represent 25% of the market. Some vendors are going to struggle to compete especially as they are powerless to stop the import of the very same brands that they manufacture”.
Shearer claims that the bulk of the grey imported digital camera, which are sold significantly cheaper than what he can sell the same brand cameras for in Australia, are coming via the USA and Hong Kong.
He claims that some vendors have been forced to lower the price of digital cameras and accessories such as lenses, and when they have, sales have “boomed”.
He claims that late last year Canon lowered the price of their lenses, and when they did, sales almost doubled.
“This Xmas will be a testing time for retailers as consumers are using the web to search for information on digital cameras. When they do they see that online retailers are selling the very same camera that we sell at a significantly cheaper price”.
A senior Canon executive, who did not want to be identified, said: “We are suffering margin erosion across both compact and in the digital SLR market. We cannot stop the import of Canon products by grey importers and we cannot stop consumers buying online. This situation is going to get worse as more consumer move to online purchases as opposed to walking into a retail store.”
They added: “It doesn’t help either that big brand retailers in Australia have not invested in online operations because they are trying to protect their franchise operators. The end result is that they will lose significant amounts of business to global traders who are opening their doors up to Australian retailers especially as the dollar is almost parity to the US dollar”.
Shearer believes that the Federal Government is struggling with the issue of grey imports which is costing Australia hundreds of millions in lost taxes.
Currently overseas purchases under $1000 don’t attract GST, and with the dollar hitting parity, thousands of consumer electronics products that retail in Australia up to $1,000 are available via overseas web sites at up to 50% less than what retailers like Harvey Norman, Dick Smith and Officeworks are selling the same product for.
The Australian Retailers Association estimate that Australian consumers will spend about $12 billion online this year, with between 40 and 45 per cent spent on offshore purchases. They claim that this equates to the government missing out on at least $600 million in revenue due to the sub $1,000 GST rule.
Australia Post has confirmed that the arrival of overseas parcels has increased 24% this year with this set to rise significantly running into Xmas.
The Retail Traders Association’s deputy executive director, Jennifer Cromarty, told Fairfax Media recently: ”We first noticed some concern last year and now it has a groundswell. If we can show there is a threat to employment then hopefully it is something the government will listen to.”
There has already been a review of the GST threshold earlier in the year but the government decided not to make any changes.