Canvera – A Digital Services Company targeting Wedding Market Needs[Business Model Overview]

[Recently I met up with Canvera team to learn more about their business, the story behind the concept and here are a few interesting details am sharing with you all.]

Canvera is a Digital Photography company (HQed in Bangalore) servicing the needs of professional photographers all over India. The company’s flagship products are high-end customized coffee-table-book that professional photographers buy to service markets such as weddings, fashion, private and corporate functions, corporate brand books etc.

The company was started in Oct 2007 and entered the market in July 2008 (raised funds from DFJ/Footprint Ventures and Mumbai Angels).
Within 21 months of operation, the company has grown to more than 300 people across 8 offices around the country with 100+ sales people in various parts of the country who reach out to professional photographers in the local geography.

The company today collects 75% of its money in cash with about 60% of its business coming from the wedding market.

Initial Idea

The initial idea/concept was to setup a B2C Internet photography company, but the team got sceptical about the long term scale of a purely online B2C business in India.

The founders started market research/door to door research to understand the real pain points in the market with the advent of Digital Photography. Their belief was the Digital Photography will fundamentally change the dynamics of the photography industry and would create an opportunity for a startup to be created to service the needs in the market.

The key was to identify the right opportunity in India around which a scalable business could be built.The founders spoke to ~100 professional photographers and realized that each and every one of them had switched to digital SLRs cameras but the transition from film to digital had initially caused them a lot of financial pain.

With film rolls, photographers had better revenues as clients had to get prints made, but with digital, most of the end clients would simply ask for CDs. The professional photographers offset this decline in revenues by selling hand-made albums that were essentially photographic paper stuck together to form a single page.

In addition the founders learnt that for various infrastructure & consumer behavior reasons most of photography in India is done by professionals with weddings driving a large majority of the revenues for the photographic industry. The hand-made albums provided by professional photographers are typically manufactured by mom-and-pop manufacturers in the unorganized segment where there is no brand. As a result there was no guarantee of quality or any reliability service (no SLAs).

End consumers complained bitterly that at the end of say of wedding the only thing left with them was the album and there was no way for them to have confidence that this was manufactured reliably. In fact many newly-wed showed how albums were extremely heavy or would just simply come apart after a few months.

Canvera founders realized that providing trust-worthy branded albums and coffee-table-book which would provide both professional photographers and end consumers trust in the quality was an untapped market opportunity.

marie claire fashion bookIn 21 months of being in the market, Canvera has established itself as a well known brand amongst professional photographers [I actually realized this when I asked a few photographers if they have heard of Canvera, to which the reply was they have been using Canvera’s service for all of their wedding album needs] and has serviced the needs of professional photographers in more than 200 cities across the country.

As far as technology is concerned, Canvera licensed some software components for its client application but due to the people-heavy and cash nature of doing business in India they built an ERP/CRM system which allows them to track the majority cash payments (cash collection constitutes 75%) that they collect from various parts in the country and also provides a holistic view of customers and their orders collected at various offices.

Sales

Like direct sales organization of firms such as Xerox, 3M, Eureka Forbes, Canvera has opened regional sales offices where sales people will reach out to professional photographers in the local geography. In addition to sales people, each office also has a few designers who design photobooks for the professional photographers based on local tastes. As of Mar 2010 all regional sales offices have broken even.

The sales team members also take on the responsibility of introducing technology to professional photographers. For the first few orders, the professional photographers will typically place the orders using CDs and cash. As the professional photographers become comfortable, Canvera sales people will introduce online ordering and payments. A number of customers have switched to online ordering as they eventually find that it is a cheaper and faster way of doing business.

An interesting insight came out during the discussion – one of Canvera’s sales executives in fact started placing orders for the professional photographers from their studios and paid with his own credit card to demonstrate the benefits (of paying online).
Customers (i.e. professional photographers) after a few such demos start getting comfortable with online payment and do switch to the web for ordering and payment.
Not only does the professional photographers benefit by getting a better QoS, the sales executive benefits by earning commissions even when he is on vacation!.

In 21 months, Canvera has achieved substantial growth and mindshare among the target customer segment – the team has focused on building customer focused business [and not just technology based].

Brief QnA with the Dhiraj, cofounder of Canvera:

Q: Marketing Strategy. How did you market in the initial days? How did you build the trust?

Our sales and marketing has always been direct sales. We started slow and contacted only photographers in Bangalore since our HO is there. Each executive in the company and all early employee met with professional photographers in their studios or in the office and tried to understand them holistically: what are their pain points, what adds value to them. And based on these learnings we tuned both our selling and our products.

Q: Coming from tech background, how difficult was it to mold yourself to the challenges of ‘real life’ business? i.e. offline businesses.

The background of the founders has always been in business that solved real world intractable problems with technology playing an appropriate part in the process. At the end of the day it is about profitably serving customers and to optimally use the tools of technology, logistics, process … whatever is required.

Q: Insights you drove from earlier experience (from shutterfly) that helped in building Canvera business.

There is the obvious which is the domain specific knowledge about this space. But the bigger insight was that Photography worldwide is irrevocably becoming digital worldwide and it has wreaked havoc in the entire industry. That havoc has created opportunities for start-ups to exists and capitalize on the changing landscape. Shutterfly’s marrying of the internet and digital photography is one such business to have capitalized on the changing landscape in the US. The challenges digital has thrown up in India have been very different and Canvera developed a business model that tried to take in to account the uniqueness of India.

Q: What are your views on digital imaging industry in India? What has been the trend in it over last 3-4 years?

With the growth in domestic consumption and Digital Imaging being driven largely by the wedding market, Canvera thinks that this industry is on a steep growth curve.

Q: Any plans to open up franchise route?

No, not in the short term. It is very important for us to manage the end-to-end experience of the professional photographers and we lose control going the franchise route. We may evaluate it a year from now again.


There are simple things that the company has done that needs mention – with each and every product, they ship Quality certificate ensuring the perception of providing quality service to customers, i.e. professional photographers.

Also, if you look at their customers, professional photographers are their real sales team – they first need to sell the concept of a stylish wedding album to their customers. And mind you, company charges a premium price for the service, so the professional photographers have to charge double premium in order to preserve their margin. Company does spend substantial effort in building the community and training their own sales team.

What’s your take on Canvera’s business model?

[Disclosure: Canvera’s Product Manager, Kanupriya is a regular author @NextBigWhat.com]

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