Going green costs printers dearly

India at last seems to be going the ‘green' way and adopting an eco friendly approach with both consumers as well as corporates cutting down over printing costs and saving or recycling paper.

This positive thinking, however, hasn't gone too well with the printer companies in India.

In a startling revelation from the latest trends in the peripherals segment, the overall A4 printer market in India grew by a nominal 0.4% whereas the same segment degrew last FY by an estimated 5%.

Although a not quite optimistic finding about the market scenario, the relief for the printer companies is that compared to the market size and sentiments in FY 10-11, FY 11-12 saw not just a recovery of the lost 5% market share but the recovery has been convincing enough for companies to focus over their bottomline, a clear indicator from the fact over the nominal growth in aggregate market size and the rising twist in the vendor's ‘percentage equation'.

According to a latest report by CyberMedia Research (CMR) over the printer market in India, the agency concluded that total sales across 65 cities in India totalled nearly 5.5 lakh units during Q4, FY 11-12.

"The weak macroeconomic outlook and hard disk drive supply chain dynamics did not help the India printer market register healthy growth rates", stated Sumanta Mukherjee, lead analyst, CyberMedia Research InfoTech Practice.

"A weaker Rupee is exerting pressure on vendors to increase printer prices ahead of the coming festive season. This may not act as the perfect incentive to lift the sombre mood of the market", Sumanta added further.

The contribution of laser printer sell-throughs to overall India A4 printer shipments increased 2 percentage points, while that of inkjet sell-throughs declined by over 2 percentage points during Q3 - Q4.

"In fact, if we look at the trends in the last three quarters, contribution of laser printers as category has increased by 5% points, while that of inkjet printers has declined by 5%", he added.

While the modest demand from the domestic SMB enterprise base triggered a growth in the laser MF printer category, the lack of a strong consumer demand deserted inkjet printer growth in 1Q 2012.

HP continued to rule the printing market but lost considerable market share in the last FY and the trend continues to Q1, FY 12-13 also. The company had 56% market share in terms of billed units, followed by Canon, Epson, and Samsung. While HP lost share in both inkjet and laser categories in Q3 - Q4, FY 11-12, Epson gained a significant market share in the inkjet segment, while Canon gained in both.

In terms of Inkjet A4 Printer sales, HP led the market with 71%, followed by Epson and Canon. In the Laser A4 Printer category, HP retained the top spot with a 53% units share while Canon and Samsung grabbed the second and third places, respectively. In DMP sales, Epson was the leader with 49% share of unit sell-throughs, followed by TVSe and WeP.
Growth in laser multifunction printer penetration was prominent in west and south. Laser as a category has displayed growth and has attracted the focus of the vendors. Irregular supplies of the top selling 1020+ held back HP in the laser segment. Epson, the latest entrant to the laser category in December 2011, has the potential to leverage on the reasonably successful models of M-1400 and MX-14, which are aggressively priced.

Further, the introduction of L100 and L200 helped Epson gain share in the inkjet printer market, while E500 generated traction for Canon.

Analyzing it regionwise, in the inkjet printer category, over the last three quarters HP lost share in eastern India and northern India to Canon and Epson, in particular.

In the laser printer category, during the same period, HP gained share in terms of sell-throughs in eastern, southern and western India, while holding fort in the North. Canon and Samsung lost share in these regions, allowing HP to consolidate.

"The inkjet multifunction printer market had been growing steadily. With improvements in technology and TCO coming down over the years, this category has found greater acceptance in the home and SMB enterprise segments and in some cases, with corporate as well. But in the absence of a buoyant consumer / SOHO sentiment, it will remain affected in the near- to short-term", stated Maninder Singh, analyst, IT Channels Research, CMR InfoTech Practice.

"A dull market has influenced channel partners' preference for trade promotion schemes. Partners would prefer to avail on-the-spot cash discounts, as opposed to overseas trips and backend incentives. This reflects the increasing importance attached to managing cash flows better, in a high interest rate regime", Maninder further surmised.