Warring Views, Hidden Costs



One of my colleagues was
buying a printer few days back from Nehru Place. I asked him why he
would need a printer at home, to which he replied that often there
are a number of personal things that he would like a printed copy.
Now I am sure there are several other home consumers like him who buy
printers. And why not, considering that printer prices have fallen
like anything? However, my advice would be unless you intend to make
some commercial use out of it, think more than thrice before going
for a printer at home, as the hidden costs of printing might lead to
severe holes in your pocket.

Having said that, the
printer consumables segment in India is witnessing a dramatic shift
with printer vendors finally moving away from the razor-blade model
to making products more affordable to consumers. So while every home
consumer would agree that the hidden costs of printing (read
cartridges, toner ink and other consumables) far outnumber the actual
printer costs, this segment has been largely overlooked by the
industry and media alike. After all consumables might be the lifeline
of the printer market, however it is yet not fashionable enough to
merit analyst dissertations.

The printer consumables
industry has always followed the razor and blade model, where the
latter costs higher than the former over a period of time. And the
key printer vendors have been taking advantage of this set-up, with
the consumables serving as the silent cash cow. However, this
scenario is slowly changing with the key OEM vendors trying to strike
a balance between printer and consumables costs by correcting their
pricing strategies and also introducing new technologies. This in
turn has the compatibles market thinking of newer ways to formalize
their business and maintain their lead.

And while there might be
innumerable arguments and counter-arguments over the legality of
refills, it’s time we recognize that refills is an important
component of this market, especially considering the India market
dynamics. Another important contributor to the growing refillers
market was the rising demand for laser toners, and the fact that it
was easier to refill these toners to maintain their quality. Last few
years also saw the formation of associations like Cartridge Recyclers
and Traders Association (CRTAI) and ICCRA for the unorganized sector
to unite recyclers and re-manufacturers of cartridges and to gain a
legal entity for their business. The objective of retail players like
Cartridge World and Cartridge Cafe is also to provide high quality
refilling without tampering with the cartridge.

Given all this traction in
the refilling market, there have been attempts to get it organized.
The CRTAI established a Standardized Test Methods Committee (STMC)
certification. It is a specification followed by cartridge OEMs and
remanufacturers globally, among Indian players as well, apart from
educating the yet unorganized section of the industry about
intellectual property matters and technological upgradations.
However, what has sullied the turf and created unnecessary problems
has been CVC guidelines to PSUs and government to only purchase from
OEMs and treat refillers as illegal entities. Rather than leaving the
market alone to play out its own dynamics and give consumers their
own choice, these issues are preventing a level playing field and
instead allowing the referee to start playing at his own will and
convenience. Unless the fair play principals are not followed to a T,
people like my friend would always burn a big hole in their pocket
when they purchase a printer.

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