Colourless Printing Market
A decline in the shipments of printers in the FY 2009 has given members of the Indian printer channel a firm indication of the daunting task facing them this year. The last four months of the year are crucial for them as the market is hoping to turn for the better.
It will not be an exaggeration to say that it was a poor showing by the Indian printer market which has been through the wringer in the FY 2009 due to the economic conditions that have played havoc with the large parts of the global IT hardware sector.
Data from the research house Gartner reveals that shipments of printers, MFPs and copiers declined by 12.7 per cent in the first half of 2009 due to global economic slowdown. "The impact of the global recession is clearly visible in the Indian market as consumers and businesses are either delaying or cancelling their decisions to buy print devices," said Vishal Tripathi, Principal Research Analyst, Gartner.
According to the report, the shipments totalled nearly 1.1 million units in the first half of the year. "New sales are also getting impacted due to the credit crunch and tight budgets. However, with the decline in hardware sales, there is increased focus from vendors on their document management software and services capabilities to help businesses reduce and better manage costs," said Tripathi.
The top five vendors in the Indian printer, copier and MFP market have all recorded a decline in the first half of 2009, with Canon being the only exception. Canon has 21-per cent share in A3 Flatbed Copier/MFP and has emerged as leader in the first half of 2009. Cannon shipped 178,100 pieces in total, an increase of 22.2 per cent compared to the first half of 2008.
Even though Hewlett-Packard (HP) declined from 53.3 per cent in the first half of 2008 to 49.8 per cent in the first half of 2009, it is still the market leader. HP shipped 562,300 pieces in total, a decline of 18.7 per cent compared to 692,100 pieces shipped in the first half of 2008.
Epson shipped 143,400 pieces, a decline of 9.2 per cent, as compared to 157,900 in the first half of 2008. Samsung Electronics shipped 89,800 as compared to 90,000 in the first half of 2008. While TVS-E shipped 70,100 pieces in the first half of this year, 10 per cent less than the same period last year.
"With the freeze on hardware spending and more focus on cost cutting, vendors are looking at managed print services as an alternative solution to help users cut costs and better manage their print fleet. This will also allow them to save money on capital expenditure," said Tripathi. He feels that print services can help businesses understand and reduce the cost associated with printing and copying.
However, printer vendors are putting a bold front and are expressing their optimism that the coming times will be good for the printer industry.
Printer vendor Epson, which remains one of the more established players in India, acknowledges that the printing sector has taken a beating this year, but insists that the company has been successful in bucking the trend.
"While you are right about the recent reports which show an overall de-growth in the printer market, we have completely bucked the trend and seen excellent growth across both Inkjet and Dot-Matrix segment in the first six months of this year," says Ram Prasad, Sr. Business Manager, Consumer Product Group, Epson India. "As per IDC, we have grown our market share by 3 per cent in the inkjet segment up to 18.4 per cent. In terms of value, we have a fantastic 28-per cent market share up from 22 per cent. In Dot-Matrix, we are holding firm at No. 1 position with a commanding 45-per cent market share. Overall, our volumes are up over the previous year."
Epson attributes its success to a right channel structure and team, good service support and innovating products. "We believe all the hard work done during the good times is bearing fruit for us now. We have a great channel structure and team in place, a fantastic service set-up, brilliant products and are constantly innovating and pushing the marketing envelope in the marketplace," says Ram Prasad. EPSON promises to continue with these strategies in the future.
Like Epson, printer vendor Canon has also succeeded in beating the slowdown. "Canon's printer division rode over the recessionary trends prevailing in the industry and grew at over 49 per cent," says V. P. Sajeevan, Assistant Director, Canon India.
“We aren't able to match our competitors when it comes to Share of Spend. This ensures we have to be that much more innovative to be able to get ousShare of attention. It means we are constantly looking for new and innovative ways of doing things. Or doing the same things differently,” says Ram Prasad. “There is a premium placed internally on new ideas, innovations, creativity and such like so that as a brand we are constantly seen as exciting and innovative. Our focus is also now on getting the communication to our end-user in more interactive and quick way. So, increasingly, we are focussing on interactive marketing opportunities mostly through the BTL activity, while at the same time continuing to generate general awareness through innovative ATL activites,” says Ram Prasad.
Sajeevan says this growth was achieved, thanks to the good performance of the laser category. “The major driver of growth for this business was the laser category where our product proposition was apt for the recession times as it delivered low cost of printing, low cost of maintenance and high RoI,” says Sajeevan. “We also gave a full toner with the machine as against a half toner or a start-up toner which was given by others. This was accepted well by the consumers.
Canon had successfully launched campaigns in its target cities to promote its printer products in these regions. “In the last one year our, Print City and city-specific campaigns have been very successful in penetrating deeper into regional markets. Apart from that, the other major growth driver was the kind of business that we got from telecom players for our inkjet printers,” says Sajeevan. “The sales of our inkjet all-in-one printers increased as the telecom players identified rural markets and needed affordable all-in-one printer. During slowdown, we ensured that our product positioning is strong enough to beat slowdown. The government sector also contributed to this growth as many new projects launched by the government held business opportunities for Canon products. Hence, consumers and businesses made intelligent buying decisions and saved money by purchasing Canon printers,” says Sajeevan.
At a time when the economy is facing a liquidity crunch, it becomes very important for a manufacturer to maintain a strong product proposition. What differentiates Canon from its competitors was the offering which delivered low cost of printing, low cost of maintenance and high RoI. “We also gave a full toner with the machine as against a half toner or a demo toner which was not given by others. This was accepted well by the consumers,” says Sajeevan.
How should resellers be addressing the market now that new business is harder to find? Neoteric is quite optimistic. “The business for printers has been growing as printer today is amongst the top 3 products that a user looks beyond the normal periphery,” says neoteric. “Today, at least in the metros and A-class cities there are many a household who have more than 1 PC/laptop at home. With the increasing usage of computers in education at schools and colleges, today many a student use printers to get their projects and other school work done through printouts. On the other hand, SMB and SME segments today work on tighter budgets and make use of resources effectively. This has somewhat hindered the growth. Today, the thrust from the printer vendors is to give maximum output from a model and also making use of green substance, thus reducing carbon emission. Today, the printers are not just a plain vanilla-looking product but have evolved into a sleek design peripheral that adds aesthetic value to a room,” says Mehul Kagalwala, AGM, neoteric infomatique ltd.
“We largely focus on our channel strategy. Hence, it becomes extremely important to educate and motivate the partners to work hand in hand with us,” says Sajeevan. Sajeevan also believes that the channel partners should be well informed about the intricacies of the product to give the buyers accurate demonstration about it. To support the thought, Canon had executed “Gyaan Yatra” in over 84 cities to train its partner with in-depth knowledge about the technology. We also have an online portal called PEPSY which stands for Partners Excellence Programme Secondary for partners to maintain their database of sales, schemes, targets, etc. For 2009, our focus is Canon GMOL (Gain More Out of Left) where we dare and we want to bank on our edge to ensure that the company and its channel partners can lead the printing industry to profitability.
Epson has formulated a systematic and streamlined channel Partner Programme called as nDimension which is one of the most holistic channel programmes to address all channel needs in recent times. This Channel programme has been in place for over two years now and is well established and set. “We have constant activities within the programme which are geared to improve the Epson-Channel Partner business relationship,” says Ram Prasad.
Resellers have been very active in box-selling and trading to other markets, but it is the opportune time for them to segment their business and decide which part of the market they wish to cater to and specialize in the same.
The customers have become more discerning, calculating the TCO in terms of printer set-up costs, running costs in terms of ink and toner consumption and productivity in terms of speed and energy consumption.
The channel should also bear in mind that even if customers are desperate to buy new equipment, they will now scrutinize every rupee they spend. Hence, resellers must articulate the benefits of the technology they are selling more lucidly than they might have done in the past.
Canon has a network of over 100 authorized service centres for after-sales support. In addition to these, we also have a Mobile on Site Service (MOSS) facility in major cities, which provides home pick-up and drop of products.
In terms of marketing support apart from regular advertising, road shows, exhibition participation, etc., Canon has also taken the initiative of providing product-guides to partners every month. Canon has also launched Partner Excellence Programme Secondary PEP-SY. This programme enables partners to directly connect with Canon. It will help Canon in identifying and mobilizing potential of second-tier partners. “Apart from these, we have also created 3 Image Lounges where consumers can experience the products with no pressure to buy,” says Sajeevan.
Epson is acknowledged as the de-facto standard when it comes to service within the printer category. “Independent as well as internal research commissioned and tracked regularly by us has shown this. We work hard now to maintain and improve the benchmark we have set. We currently have 187 service centres in 154 cities across the country, which means our service is not just excellent it is available in every nook and corner of the country,” says Ram Prasad.
“At Canon, we target crucial cities through our outreach campaigns. For the Consumer Systems Product division, it becomes extremely important for us to reach to specific cities to ensure presence in these markets,” says Sajeevan. This year, our focus is West and South. Hence, a lot of our marketing efforts are targeted at the Western and Southeren markets. This year, we launched Print City campaigns in Ahmedabad, Pune and Nagpur which helped us reach out to every nook and corner of the western market. “We also conduct roadshows, demos, etc. to train the partners with the products. We also aimed at get closer to the regional audience, while we devised our region-specific campaign like Mana Hyderabad this year. This campaign has shown great results this year. Campaigns like Namma Chennai. Namma Bengaluru,, Humari Delhi and Amchi Mumbai are successful predecessors of the Hyderabad plan,” says Sajeevan.
EPSON has the range of products which are specifically suited and targeted at various verticals. “We position the product based on the key requirements for each vertical. We ensure that, our communication packages to the total product/solution offering are customized and specific to the relevant verticals,” says Ram Prasad. Some of the key focus areas for Epson this year are Education, BFSI, Large Corporations & Government Sector and SMEs.
The four specific verticals which are important for Canon are Government, Healthcare, BFSI and Telecom. “Our vertical-specific strategy includes setting up of two sub- divisions - SI and Corporate CII to focus on the most growing segments. Additionally, we have added a sales team dedicated to interacting with System Integrators across the country. The Corporate CII team interacts with the top 200 accounts directly and understands the customer requirements. In terms of marketing support, advertising, direct mailers and after-sales support are also part of the marketing strategy,” said Sajeevan.
According to Canon, government vertical is going to be the most active this year. With the government focussing on e-government projects in a big way and the launch of many Mission Mode projects, there is a huge infrastructure and investment deployment in these sectors. “The major need of these projects is archiving and printing and Canon has many products to cater to this segment. For both inkjet and laser, government will be an active vertical,” says Sajeevan.
“We strongly believe in being proactive in creating demand generation activities and hence since the beginning of this calendar year we have travelled across through some top of the upcoming business cities through our very own Xplore & Evolve road shows, “ says neoteric. “All along, we have received tremendous response from the channel partners. Our approach towards showcasing of products and technologies live has been well appreciated. Secondly, we also do various on-street marketing activities in various cities to touch base with second and third tier partners that help us get first level feedback and strategize our activities accordingly,” says Neoteric.
Epson has a strong retail channel network of close to 4,000+ Partners across India. “Apart from these, we have strategic tie-ups with most of the established LFRs (Large Format Stores) now. Both the retail segments - large and small - are of tremendous importance to us going forward,” says Ram Prasad.
The customer base of today is tech savvy and wants to experience the technology before they buy and hence Canon provides them with a chance to experience its products before making an actual purchase, which is a benefit that cannot be derived from standalone shops. Canon realizes the immense potential of retail and is expanding its penetration through various formats.
Canon has taken a lead by introducing a whole new concept of the “Canon Image Lounge” which is a first-of-its-kind initiative in which the customer gets feel of the product even before they but it. These concept stores display the entire range of 145 Canon products like printers, cameras, camcorders, scanners, projectors and all-in-one printers all under one roof. All these products are for “touch and play” with no sales pressure. There are three such showrooms in Gurgaon, Bangalore and Mumbai.
Canon realizes the immense potential of retail and is expanding its penetration through various formats such as National Retail Chains and City Retail Chains - Canon has a strong presence in the country for its printers across 16 major retail chains operating in India with presence in 280 stores, 35 city retail chains and over 4,000 dealers.
For the consumer Systems Product division, the year 2009 by far has been very good. Samsung is currently No. 1 in the scanner segment. Growing at the rate of 49 per cent, our division is the fastest-growing division in Canon. Both inkjet and laser segments are performing very well. “We are the market leaders in the laser printer segment in over 10 cities in India with a market share of 33 per cent and are aiming to be number 1 in the laser printer category nationally,” says Canon. “We see a growing demand for laser printers. Having launched newer technologies in the inkjet segment, we feel our sales will definitely shoot up in this segment as well. Though we are No. 1 in scanners, but we still see a considerable market that can be tapped to sustain our leadership.”
Epson has been growing close 15 per cent - 20 per cent growth in the last six months. “We hope to sustain the same in the balance period of this financial year as well,” says Ram Prasad.
“We look forward towards vendors in supporting these kinds of activities through their participation. We also understand each region/zone has its own peculiar requirement/ demand and various marketing programmes need to be developed accordingly. Hence, we closely work with vendors on creating programmes that will work well regionally also,” says Mehul Kagalwala.
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