Printers: Frost-bitten Growth

Indian organizations are still largely paper-driven. But there is an increasing importance of digitization and the need to access information anytime, anywhere. This led the market to grow merely at 8%

The printer market is one of those territories where blind growth has dried up in the last couple of years. While this market suffered setbacks during the slowdown because of the heavy focus on digital document management by enterprises, it has witnessed partial growth in some of the categories in FY13-14. Yet it is no surprise. As many vendors believed that the market was looking for better and affordable alternatives, they have tried to make printers more efficient at lower cost. As a result, vendors tried to woo customers through their new launches that claimed better performance at lower cost of ownership and operation.

This year Dataquest tried to revisit the estimates with the help of CyberMedia Research (CMR) so that we could reach the exact market figures. With our joint effort, we discovered that the printer market in India witnessed a growth of about 8%. Last year, the printer market stood at `2,406 crore, whereas it jumped to `2,587 crore. A number of factors attributed to the growth of the printer market including the new launches by HP, Samsung, Canon, and Epson.

Indian organizations are still largely paper-driven. But there is an increasing importance of digitization and the need to access information anytime, anywhere. This represents an opportunity for print providers to expand their services into optimizing the document workflows that support business processes.

Overall printer market in India stood at `2,587 crore with 8% market growth from last years `2,408 crore. In the overall market, HP is the leader with 41% marketshare followed by Epson with 17%, Canon 14%, Samsung 8% and Brother with 5%, among others. In the A4 market, the competition is very tough in the stagnating market. It is important that vendors innovate to reduce the cost and show viability.

The combined serial inkjet and page printer, copier and multifunction product (MFP) market in India drove growth. But the decline in shipments continue to worry the vendors. According to Gartner, total end-user spending remained almost flat. It further outlined in one of its surveys that vendors are targeting the small and midsize business (SMB) and small office home office (SOHO) markets in India with increased focus on the cost and quality needs of office users. Key market players are trying to stimulate demand with new offerings and working closely with channel partners for market expansion.

HP remained the market leader in the Indian printer, copier, and MFP market. Other important players which dominate the market include Canon, Epson, Samsung Electronics, etc.

Inkjet: Redefining the Market

The biggest reason which led the market to grow is the emergence of inkjet printers. A number of vendors including HP, Canon, and Epson exploited CISS (Continuous Ink Supply System) technology which helps inkjet printers to perform at par with laser printers and that too, at a lower cost. The year witnessed a host of launches by HP, Epson, and Canon. HP was heavily focused on this segment and experimented in the newer markets. It tried to reach out to new segments including the SMBs where the adoption levels are low.

“As the printer market continues its journey towards revival, some interesting patterns emerge. The multifunction segment increases its dominance over their single function counterpart. Innovations around ink multifunction printers help grow the category from 19% to 22% in FY14 in terms of revenue contribution, from a year before; while the single function laser printers contribution declined from 30% to 28%. One of the key reasons have been the new found ability of an inkjet printer to print at a low cost (through CISS). It has certainly influenced a segment to choose inkjet printers over laser,” opines Maninder Singh, Analyst, Infotech Practices, CMR.

Even the inkjet printer market has not been an easy ride, since the single-function inkjet market witnessed a downward trend. Many believe that it is mainly due to the focus on the multifunction. All said and done, the vendors have to sell hard for growth and marketshare. The single-function was `146 crore in FY13 whereas it declined to `134 crore in FY14 with a decline of 8%. With the decline in the single-function market, HP seems to be a little nonchalant to cater to this space and stands second with mere 20% marketshare, whereas Epson leads with more than 72%.

Multifunction inkjet market grew significantly in FY14. This segment in the inkjet market registered exponential growth of 30%. The market stood at `586 crore in FY14 from `448 crore last year. HP renewed its strategy to win markethsare and increase footprint as it launched campaigns to woo customers in tier-2 and -3 markets. The company announced a range of printers to increase the variety for all kinds of customers. HP led the market with 43% marketshare, followed by Epson with 38%, Canon 13%, and Brother 7%.

Laser’s Fading Glow

During the recession, it was the laser printer market which saved most of the printer players. While other segments were not performing up to the market, only laser printers had customers. However, the trend seems to fade as evident in the figures for FY14. Single function laser printer seems to hit a roadblock as customers showed interest in buying only multifunction printers. This is the reason why single-function laser printer market was flat in FY14. However, the market has witnessed the entry of new players in the last few years.

Another reason why laser printer market is witnessing a low growth is the high cost of printing. Plus vendors have found the way in inkjet printers for low-cost printing. So inkjet printers have started to eat laser market.

Single-function market stood at `734 crore in FY14 whereas it was `731 crore last year. So the growth in the laser single-function was flat for the reasons cited above. The market was led by HP with 40% marketshare, followed by Canon with 23%, Samsung with 15% and Brother with 5%, among others.

Multifunction laser is still able to grow in double-digits in India. The market stood at `892 crore with 12% growth in FY14 from last years `794 crore. The market is again ruled by HP with 55% followed by Canon and Samsung with 13% and 11% respectively. HP is the undisputed leader in the laser printer market. Brother owned 5% market.

Since most of the vendors are struggling to meet customer expectations of low cost printing in this segment, they have decreased their focus from launching new products. However, they continue to bring in new products but the frequency at which they used to do was not there.

Putting the Dots Together

Dot-matrix market continues to go down in India. However, it is believed that it will not vanish completely because of its heavy usage in the retail, banking and other sectors to generate memos and other documents are low cost. In numbers, the decline in the dotmatrix printer is apparent. In FY14, the market stood at `242 crore from `287 crore. It shrank 16%. Well there is no surprise if the market has gown down. The users have heavily moved to laser and inkjet.

The players in this segment continue to launch printers for some of their loyal customers in the government and retail space. Epson is an undisputed leader in the dot-matrix printer space with 52% marketshare followed by TVSe and WeP with 27% and 21% share respectively

Will it Exist?

The trends in the printer market cast doubt whether the printer market will exist tomorrow or not. No doubt, it is a heterogeneous thought that is far from reality. But it points out towards the fading role of printers in today’s business world. A number of organizations have begun to focus on digitization of documents to save on paper and file management. But everything can not be digital. Print will remain and so the demand for printers in the market. The vendors would need to innovate and reduce the cost of printing even further.