Trends Set to Affect the Indian Aftermarket Imaging Supplies Industry in 2022

–By Mr. Shashank Ruiwale, President, Indigo Prints Smart Private Limited (brand Formujet)

We are into a new period, a period of transition, a period of rapid changes happening worldwide. New innovations are challenging the traditional methods and tactics.  Imaging supplies industry is also affected by the new developments in OEMs and aftermarket segments.

After having been taken over Samsung Printer business by HP, printer space changed a lot. Canon is emerging strong at No 2 in terms of installations of laser printers in India and Kyocera is certainly creating ripples in the market space. HP adopted new generation chip technology – miniature size ASIC chips with high volume of memory, and with serial number to each chip getting memorised with printer. This is a significant jump in HP’s chip technology, which makes it difficult and time consuming for the aftermarket industry to develop an alternative solution to them which makes it compelling to us only the HP OEM cartridges for many new models.

Thus, HP has successfully implemented Dynamic Chip Security Features with Inkjet Officejet Printer Series and Wide Format Inkjet Printers, creating a large number of rejections for compatibles and remanufactured cartridges with replacement chips. This is helping HP to gain more share for Original Consumables. Customer is getting harassed by many firmware updates by Choice or automatically (by habit) and thus third party consumables are giving error messages at intermittent stages, even before the ink in the cartridge finished. Customer feels helpless and vendors have no solution yet for the challenges. HP is cautious about introducing these features in Desktop Laser Printers as the disruption may create furore against the company , however, HP is using these tools in High End Widely popular M 438, M 440, M 442 printers using cartridge numbers 335 (w 1335a / w1335x) and CF 257a imaging unit.

 SOHO inkjet space is well dominated by Epson, acquiring market share at lightning speed and Canon has grown into a formidable competitor to Epson in the Ink Tank Printer Segment. Canon introduced 6 colour Photo Printers and Pigment Ink high speed document printers to offer challenges to No 1. We see contractions in market share of HP Ink Tank Printers and Brother Ink tank printers, due to various reasons. HP is strategically withdrawing from this segment, while Brother does not seem to have overcome Supply Chain Difficulties created by Pandemic.

In compatibles market, solely dominated by China, Q42021 saw multiple levels of price increases for toner cartridges. About 75% of the volume bearer models like 12a, 88a, 78a, 85a, 337 have now increased prices by 35% over what they cost a year before. Highly increased shipping costs and lengthened delivery times have substantially added to the costing. With the impending supply disruptions due to Chinese New Year in Jan-Feb 2022 in mind, importers have resorted to largescale orders, whereby monthly import of toner cartridges in Nov-Dec 2021 and Jan 2022 months had been almost two and half times over the monthly average of 700,000 cartridges. This oversupply is temporary, however, going by the cash flow pressures of largescale imports, there is tremendous price pressure at the importer level. Bubble bag cartridges are generally sold at margins as low as Rs. 10 or 15 a piece which is around 5 to 7 % of landed cost (that is 6% gross). 

Toner powder (bottles and bulk) market is shaken up. Due to extremely high anti-dumping duty of Rs 115 per kg, imports have been outclassed. Indian manufacturers have been at a great advantage, however, constraints in supply have become a daily case. This is due to the unprecedented shortages of chemicals and resins in international market, coupled with delivery and shipping delays. Capacity and quality challenges are overlooked by everyone and supply is getting monopolised by limited vendors. Steady price increase on monthly basis has seen toner bottle price increase of Rs. 10 to 15 (16-20%), putting pressure on the margins of small refillers and jobbers.

Indian Economy is likely to grow at 9% in 2022 whereas imaging supplies industry is heading for a doom, with respect to margins and quality of the imported product. I suggest industry leaders (traders & manufacturers) to come on the platform and time for introspection.