Consumables: Fine Prints You Cannot Read

While in FY 2013 the consumable vendors worked towards spreading awareness of original consumables, in FY 2014 they further evolved with their approach towards the supplies. They revisited the concept of calculating the Cost Per Page and introduced it for inkjet range as well. This concept gained most popularity among all the OEM vendors, who no longer talked about the pricing of the cartridges alone, but advocated the Total Cost of Ownership (TCO) perspective. As a result, there was further fall in the prices of the cartridges that were sold as a bundle with the hardware, especially at the entry level.

This pricing, however, was challenged by market, claiming that in real terms, the discount in prices of the cartridge were not proportional to capacity of the cartridge, and made the customer, eventually, pay more. And this became the selling point for the other players. Also many of these third party vendors grabbed OEM market from on-demand refilling, where customers could re-fill and pay for just one required color and not the entire pack.

Another trend was Managed Print Services MPS) that saw wide adoption in the market. Though instituted by printer vendors to look at the entire life cycle management of the hardware (from purchase to end of life), the OEMs/re-manufacturers/re-fillers extended it further to cartridge management. Amidst the concern that lot of customers, especially SMBs, preferred buying OEM cartridges to abide by the warranty and repair conditions, MPS was effective tool for the re-manufacturers in securing a few SME and enterprise clients and increasing sale at least by 8-10 %.

An international report challenged this theory stating that warranty of the cartridges did not apply to malfunctioning of hardware caused due to third-party refilling. It was observed that customers got further smarter in defining the printing needs. They further consolidated the IT Infrastructure in what they defined as work group printing. The opportunity was in increasing demand of photo-printing,  high yield printing solutions, eco-friendly paper usage. Government, BFSI, Insurance were among the major buyers. Understanding it, the re-manufacturers took up the entire service and warranty responsibilities, and were successful in gaining share in large enterprises.

But their bigger challenge was availability of doctored and degraded cartridges that was discouraging wide adoption of compatible cartridges. A Mumbai-based importer and distributor of re-manufactured supplies, Indrayani Sales Pvt Ltd, aims to change this dynamics and customer perception by supplying better and performance oriented cartridges. The company has set up a facility that can manufacture upto 1lakh cartridges. The company has also received interest from internal re-manufacturers like US-based Clover Technologies and Canada-based Printfleet Inc. The same is true of Delhi-based ProDot who has set up their manufacturing base in Uttarakhand.

Now is also the time of getting the right start for right business opportunity. Many smaller players have succumbed to competition and vanished from market while a few like cartridge cafe and print studio surviving on the edge. As per a rough estimate, the cartridges ecosystem today consists of around 10 OEM vendors, 100 re-manufacturers and 2 lakh re-fillers. Roughly Rs 200-300 crores raw material s are imported in the country. Now, that battlelines are drawn between OEMs and re-manufacturers, the whole choice should be left open to the consumers to make his best choice. Only then the consumables market will flourish in the real sense.

Rajneesh De

(rajneeshd@cybermedia.co.in)