Hit by 'grey' inkjets, HP drops prices

The past three months, the market has been witnessing a strange phenomenon--grey inkjets. It is estimated that between 20,000 to 30,000 of these grey HP inkjets have reached India. This in turn has severely impacted the sale of the genuine HP inkjets. However, the actual number of printers coming in, and yet to be traced, could be drastically higher.

According to Ashwini K Aggarwal, Country Consumer Category Manager, HP India Pvt Ltd, for the first time in its history, HP is witnessing such an organized and large scale entry of grey products in the Indian market. While the Mumbai market is already flooded with these grey printers, Delhi is fast catching up. So are Bangalore, Chennai and Hyderabad. Beyond the metros, these printers have also been traced in Pune, Surat, Ahmedabad and
Indore.

"Back-tracing the serial numbers we have found out that the current consignment of these printers were billed in Europe to a party in Singapore for customers in Egypt and Iran. We are at a loss as to how these products have landed up in India," pointed out Aggarwal. It is interesting to note that the printers being sold in the grey market are the latest HP models at price which is slightly lower than the legitimate printers. HP has decided to slash down the prices of its Deskjets drastically--around Rs 1,000 to curtail this practice. The new pricing means that Deskjet 656 now streets at Rs 4,000, Deskjet 845 at Rs 4,999 and Deskjet 920 at Rs 6,500. 

"Two things are likely to happen now," according to Aggarwal. "One is that the grey marketers will now buy some of the HP original products and mix it with the refurbished printers. Or they will open the box and sell off the cartridges independently.

Without a warranty and support from the company, there is very little choice."

The channel partners of HP are welcoming the decision. According to Anil Sachdeva, CEO, Kadam Marketing, the new prices would see the numbers happening, and put an end to the grey market. "As far as we are concerned, our sales had dipped by some 25 to 30 percent ever since these grey printers had hit the market." Ashok Grover, Director, Groovy Communications, has a similar story to share. "The grey market was selling at prices even lower than our buying price! Our sales had dipped by some 40 percent. But we are happy with the decision of HP to start a price war, all the more so as the company is offering stock compensation."

Keshav Madhav, Director, Vidur & Co, informed CNS that the new prices have already been effective from the afternoon of 17 July. "My sales had dropped some 15 to 25 percent over the past three months. But now things should be much under control." 

In addition to slashing prices, HP is coming up with an intensive awareness program. It has already contacted close to 8,000 of its registered resellers. There are reseller-to-reseller contact programs and door-to-doors lined up. As far as good old Nehru Place is concerned, the company has set up an information kiosk to increase the awareness of potential customers and resellers alike. And the response has been overwhelming so far. According to Naushad, the person manning the Nehru Place kiosk, already some 500 people have visited the stall within the first three days of this fortnight-long campaign. 

Asim Raina & Sudarshana Banerjee

(CNS)