This discussion focused on how fast changing technology and shifting market trends are affecting the businesses and operations of vendors, partners and consumer behavior in the aftermarket imaging consumables industry, and how to perform successfully in the present industry conditions. The opportunities and challenges for manufacturing in India.
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MODERATOR: Mr. Sukanta Dey, holds an MBA from IIM-Kolkata and a B.Tech from IIT-Kharagpur. He is an ICT industry veteran & expert who worked in senior positions with several leading companies.
PANELISTS: Mr. Masood Ahmed Khan, President, Image Star Pvt Ltd; Mr. Devesh Rastogi, Chairman, FAIITA; Mr. Sanjeev Mahajan, Country Manager India and South Asia, INTEGRAL; Mr. Puneet Singhal, President, Computer Media Dealer Association (CMDA-Delhi); Mr. Sandeep Sanghvi, Managing Director, Itone; Ms. Aarushi Rajpal, Director, ProDot; Mr. Joseph Peter, Sales Manager – South Asia, Tomoegawa, Japan; Mr. Dhruv Mahajan, International Business Development Manager, Ninestar Image Tech Ltd.
MODERATOR: Mr. Sukanta Dey, B.Tech in IT from IIT Kharagpur & an MBA from IIM Kolkata, An IT Industry Veteran
“Today, the government of India is encouraging the global printer brands to set up manufacturing plants in India, so that it will create more job opportunities, reduce the dependency on imports and prevent the flight of foreign exchange. Several Indian companies have also started manufacturing or assembling cartridges in India. This make in India trend is also indirectly boosts the growth of secondary industries that provide raw materials, chemicals and components; leads to skill development and growth employment in the country; and prevents the flight of foreign currency. Coming to toners, due to the competition from the imported toners, setting up a new toner manufacturing plant in India in a cost-effective manner remains a challenge. To make manufacturing successful the companies should focus on R&D. Another issue that is of concern is shrinking margins due to completion from low quality cheap products. High price-sensitive in the market and unhealthy competition is making the smaller players very difficult to survive. The audience would like to listen to the opinions of the industry stalwarts regarding the issues.”
Mr. Masood Ahmed Khan, President, Image Star Pvt Ltd
“I owe a lot to the Indian customers, the partners and the Indian imaging industry and for my success. As our esteemed panelists have shared, one issue that concerns everyone in the imaging industry today is the continuously shrinking margins. I think this is mainly because our own attitudes; we are competing to sell products at lower prices to make short term gains, and a result, the margins are shrinking. We should provide products of the best possible quality but without compromising on prices. Our product prices should be reasonable giving decent margins to the partners but not bow to lower levels. We at Image King aim to provide top quality products without compromising on the prices. Drop in the value of the Indian rupee versus US dollar and increases in the import container costs are pushing up prices and putting further pressure on the margins. OEMs increase the prices of their consumables regularly, but we in the aftermarket are going in the opposite direction dropping the prices of our compatibles regularly. This puts the whole industry in an awkward situation. Another reason for this sorry state of affairs is we don’t have a potential trade association where we could meet and discuss the issues and act with a common agenda; each one of us is acting on their own without concern for others’ opinions or issues in the industry. Industry is consolidating and it is getting difficult for the smaller players to survive. There is an urgent need to have a strong trade association in our industry. We have to work with a common agenda that will benefit all. Unity is strength. United we succeed, divided we fall. We have to make profits, of course without breaking the ethics. There is a lot of business in the market, provided we tap it properly and profitably without compromising on the ethics. Earlier, at the global India did not enjoy much attention, but today whenever I go abroad, I find people look up to India as a great emerging power in terms of technology, growth and prosperity. The onus is on us to perform, maintain standards and stand up to their expectations.”
Mr. Devesh Rastogi, Chairman, FAIITA
“Today, Make in India is no longer an option; it is now essential for the companies to survive and become profitable in the long-run. The dropping value of the Indian rupee against foreign currencies and increasing import container costs are set to make importing costlier. FAIITA is urging the government to increase customs duty further on certain products so that they can compete better with the imported products. FAIITA is doing everything in its capacity to encourage make in India initiative and to encourage customers and partners to purchase Made in India products as far as possible. One by one, even printer OEMs are now setting up their manufacturing plants in India. Many PC manufacturers have already set up their manufacturing plants in India and this trend will soon catch up OEMs providing printers and consumables. The government is also amending its vendor-assessment policies to prevent foreign-made products indirectly entering the GeM with an intention to allow only genuine made in India products will be sold through GeM portal. To improve the customer confidence, the domestic manufacturers must focus on quality and then the demand will automatically increase which in turn helps to do mass produce and improve margins. Mass production also helps backward integration where the local companies would also manufacture the needed components and avoid or reduce imports. This has already become a reality in the computer industry, which will also become the trend in the imaging consumables industry. So key to success is gaining customer confidence through providing the right quality, durability and consistency, and generate higher sales volumes which in turn will lead to backward integration and improved profitability both for the manufacturers and the partners.”
Mr. Sanjeev Mahajan, Country Manager India and South Asia, INTEGRAL
“I would like to address two things here. One is the size of the market for toners – India’s bulk toner consumption is 350 tons per month for laser printers and 250 tons per month for photocopiers. There are 10 million laser printers and 3 million copiers installed in India. Next, there are 5 types of cartridges used in laser printers – 1. OEM cartridges which have over 50% market share in terms of value (3 lakhs per month in terms of numbers), 2. Compatible cartridges (9 lakhs per month), 3. Reman cartridges (1 lakhs per month), 4. Refilled cartridges (about 5 lakhs per month), 5. Made in India or assemble in India cartridges are about 5 lakhs per month. Right now, the lack of availability of raw materials and components is major impede to the domestic manufacturers in India. If Indian companies could manufacture and export cartridges, then there is a very big market overseas. There are only 4 or 5 toner manufacturers in India. Domestic manufacturers should provide high quality and consistency to spur demand in the domestic as well as foreign markets. This will boost the demand which in turn lead to produce in mass, take advantage of Economies of Scal be successful. Currently, copier toners offer better margins. Though there are challenges to Make in India at present, I am sure the make in Initiative will be great success in the coming years and decades.”
Mr. Puneet Singhal, President, Computer Media Dealer Association (CMDA-Delhi)
“We are actively supporting Make in India cartridge manufacturers, but there is also a problem of Fake in India, where the compatible cartridges are entering India with Made in India tag printed on them and they are reaching even the government users without the users knowing that. We are trying our best to curb this obnoxious trend of counterfeiting. There is an urgent need to standardize quality and originality of the imaging and other products going into the market. We are discussing with the BIS, the ministries and other government bodies to develop an R&D and monitoring system which helps to measure the quality of the consumables whether they are imported or made in India so that the quality could be judged more accurately and standardized, and prevent low quality products entering the market and upsetting the operating prices. I also have one out the box suggestion according to which the Make in India manufacturers and brands to rope in actors and celebrities to promote and urge the users to purchase only the made in India products.”
Mr. Sandeep Sanghvi, Managing Director, Itone
“At Itone we give a lot of importance to quality. Color toner is our main focus in addition to other accessories. Currently, we are only importing from the top class providers from abroad. Despite being costly, OEM consumables are selling more because they have that trust and image among the users. For Made in India products to be successful, domestic manufacturers should develop that trust through providing high quality and consistency. That will help to push up demand, increase production volumes, margins and then be able to export.”
Ms. Aarushi Rajpal, Director, ProDot
“We at ProDot are into manufacturing toner cartridges and computer peripherals. As far as cartridge manufacturing is concerned, all the domestic manufacturers are focusing on a few fast moving cartridge variants. Currently, most of the components that go into assembling cartridges are being imported from China as they are not available in India. Next, the drop in the value of the Indian rupee against US dollar is making the imports costlier and as a result our margins are shrinking as we are not increasing the prices of our products in proportion to the increasing costs of the imports. One satisfaction we have is that we are able to provide employment to local people. It takes some time, before the Indian manufacturers could compete with the imported compatibles and OEM products. AI is mainly involved in voice-enabled printing. Right now AI has little impact on consumables industry. Maybe in future AI might impact aftermarket products. For Make in India to be successful we have to maintain high quality and quickly adapt to changes in the market.”
Mr. Joseph Peter, Sales Manager – South Asia, Tomoegawa, Japan
“Tomoegawa is a 70-year old global manufacturer of toners for OEMs and others. In India, Tomoegawa is mainly focusing on three segments to sell the toners: 1. OEMs, 2. The refurbished machine sellers and 3. MPS providers. OEMs to stay ahead of their competitors and also compatible providers keep upgrading their technologies and provide better and new toners. So we at Tomoegawa also keep pace with these advancements to provide new and better toners on a continuous basis. Tomoegawa has over 600 variants of toners. The Indian toner manufacturers also should focus on keeping pace with the advancements that are taking place across the world to stay in the domestic market and then export to other countries. Another major shift that is taking place in India is the growing usage of color toners though the demand is still not much. The Indian entrepreneurs should also think of manufacturing color toners in India because the future is for color. There is a lot of future opportunity in India for color toner manufacturing despite challenges at present. According to one survey demand for laser toners is gradually decreasing worldwide due to increase in the paperless office and this trend might catch up with India in the next decade or so. The manufacturers need to be prepared to judge the future trends and swiftly adapt to the changes in the market.”
Mr. Dhruv Mahajan, International Business Development Manager, Ninestar Image Tech Ltd
“I represent Ninestar, which is one of the first to launch imaging compatibles globally and we have customers all across the world. We have one of the biggest and most advanced R&D and manufacturing facilities in the world. Ninestar uses the latest technology and develops and markets the latest variants. As far as Make in India is concerned, we have not seen any drastic increase in the Made in India products to substitute the imports, but I think in future, the share of the made in India products will increase. In China, we do have influencers to promote Ninestar aftermarket compatibles, but in India the trend does not seem to have started yet. I believe that Indian manufacturers should do something novel to attract the attention of the customers like using influencers and launching innovative promotion strategies.”
Panel Discussion in a nutshell
One important action the brands and sellers should do is they should not cut the prices, rather provide better quality and maintain decent prices. Next, government also should find a system to curb low quality grey products invading the market and upsetting the prices. Then there is an urgent need to have an effective and strong trade association which will act as platform for the industry players to interact and set price upper and lower price limits to products to prevent unhealthy price competition. There is a consensus among everyone that for the Make in India to be successful, players should provide the quality comparable to the imported ones. They develop a strong domestic customer base before they could export. Some toner manufacturers have already started exporting and others to can catch up. We wish a successful Make in India and successful imaging industry in India.
Covered By: Imaging Solution / 11th Imaging Solution Conclave
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