Counterfeit HP cartridges are creating a havoc in the market

This has been happening for about five to six years now. But it's only in past two months that people have actually started feeling the heat, about the counterfeit cartridges of HP LaserJets and DeskJets that have been raiding the market for long now.


It has been discovered over a period of time that resellers--including even some of the Registered Supplies Resellers (RSRs)--are mixing counterfeit cartridges along with original HP cartridge due to which they are able to sell at ridiculously low prices, which are again much below the standard RSR landed cost.

The trend prevalent is that the 'manufacturer' opens the original packing, very neatly, takes the original cartridge out, puts in the refilled one and packs it again--as it is. No layman's eye (or even of the experienced, for that matter) can make out the difference between the two, until and unless it is operated till the skin. The original ones then are sold either without the packing or in the fake packing--with a guarantee.

On its part, HP has issued a letter to all its RSRs and sub-distributors to refrain from such activities; has given the hint of surprise raids and severe legal action against defaulters. But by when does it see its end, is something even the company doesn't know.

The problem is basically not that refilled cartridges are sold, they were always there. The particular factor that is creating the shuffle and jumble in the market is that slowly and steadily it is spoiling the market operational price.

Even if he plans to cut down on price, he can for sure not go to as low as Rs 90. As explained AK Pandey, MD, Miraj Marketing, "I can lower down the margin that HP is giving me by two percent or maximum three percent, but definitely not 10 percent. Prices are already so ridiculous. By continuing selling at these, we are actually fiddling with the Rs 200 crore industry, which would not sustain this kind of things for long."

The 'credit' for this mishappening can be given to the huge and voluminous promotional schemes by these principals. Of course the 'A' factor is the bad shape of the economy. Principals come out with lucrative promotional schemes off and on to induce dealers to pick up material. All the dealers are tempted to buy more, which eventually becomes a problem to get over with. Here comes in the cut-throat competition in the price. All try to beat each other. Then somebody comes up with this idea of mixing the counterfeits and 'disposing' them off in mixed bunches and liquidate the price that they should actually get.

Naresh Kohli, Director, International Computer Resources, explained that "Technically this mixing is about 10 percent. The principal companies are not bothered right now because as of now the ratio is like 10:90, where 90 is still the original. They would start taking care of it when it is the other way round. Before that, we dealers are the sufferers."

On the confused and jumbled situation, Dinesh Chopra, Director, Softek Surya, came out with a notion, "First step that these principal companies should take is that they should stop giving all these schemes and offers. By now they know for sure that no one actually keeps it to himself, on the contrary dealer tries to sell it off. Skipping on the volume issue, they should try to tackle this with an administrative measure, after some deep thinking."

But if one goes back to basics, it can actually be derived that whosoever has the lowest price is unarguably the black sheep amongst the lot. Again after fundamentally evaluating that, then this person is actually not making any profit. All that he is doing is rotating and circulating the funds.

Explained Neeraj Munjal, Director, Dhruv Sales and Marketing, "Apart from circulating, these people are basically selling on the speculative mode. This is again a by-product of HP's mystery schemes. It implies that the company may pay an extra discount to the person who buys a particular number, which he takes that it 'may' compensate. Now this is basically a cascading effect that is taking its toll right now and slowly the price of counterfeit cartridges is becoming the market operational price."

One major factor that is working as a fuel in the fire is the excess sales pressure. When they have to sell, they know that it would surely not take off at the original price. So they are forced to mix the fake ones, to keep the business running.

Said Puneet Singhal, Director, Pioneer Enterprises, "It is basically the customer who needs to be educated. People wanting to be in the genuine business are the sufferers. They are either forced to be out of business or are forced to sell the counterfeit ones, thanks to these few people. Eventually they will pick up the later because they have to survive. Also, till HP does not stop the problem of over distribution, nothing can be done about problems like this."

Not much back, same thing was reported in Mumbai. The black sheeps were caught and arrested. But why is it taking that long for the company here in capital, is a mystery as of now. But dealers are hoping that may be something of this sort happens here as well.

Rajesh Aggarwal, Director, Micromax Technologies, said, "All that we as dealers can urge customers is that they should destroy the original packing after taking out the cartridge and should make it a point to destroy the empty cartridge as well, in case they do not want to get it refilled."

This is a Rs 200 crore industry and its growth prospects are immense. But these kinds of things are not only spoiling the consumables segment but the whole printer industry, which certainly needs to be dealt with utmost priority. Because, if it continues like this for long, one day it would actually blast.