A3 MFP market in India will continue to grow in 2014, says IDC

The Indian economy in CY2013 went through a challenging phase with high inflation and a slowing growth. This coupled with the state and national elections created a slowdown of the overall economy and ICT spending.

Despite these challenges, the copier market in India has shown resilience. According to International Data Corporation (IDC), the India Quarterly State-Level Copier Tracker shipments were 1.07 million units in CY2013. This represents a 1% decline compared to the previous year CY2012.  One ray of hope came from the colour printer segment, showing 20% year-on-year growth, with mid-segment Average Selling Value and above price-band models.

In Maharashtra, Mumbai contributed more than 50% of the state’s copier sales output. Being the financial, commercial and entertainment capital, Maharashtra contributes a good quantity of sell-through from the mid-segment in addition to the entry-level segment (which contributes the maximum in every state.).

In Delhi, the national capital and centre for Government, Defence and Public Sector, technology procurement continued. Given almost all copier vendors are headquartered in and around Delhi, they can maximize their focus on these customer segments, particularly in Q1, which is the last quarter of the financial year. Most Government departments’ funds froze up towards the end of 2013 as the country headed towards national Elections in the first half of 2014. While this slowed down the sentiments of the market somewhat, some cash-rich vendors responded with an aggressive penetration pricing strategy.

In Karnataka, Bangalore is the major contributor being the hub of Information Technology/Information Technologies & Enabled Services (IT/ITeS) companies. Interestingly, IDC observed that a lot of major companies were setting up their branches in the Tier-II & Tier- III cities of Karnataka such as Mysore, Mangalore and Hubli. The demand from these cities increased whether it is from IT/ITeS, Manufacturing, Construction or Education. For example, HCL Infosystems closed a large deal (nearly 1,000 units) on behalf of Toshiba in Q4, 2013.

Joydeep Dey, Senior Market Analyst – Channel Research, IDC India, said, "The maturity of  printing technology is aggressively being addressed and awareness made by the vendor community in educating the end-user community. As a result, the maturity is observed through the growth of the colour segment picking up as well as a gradual shift towards Managed Print Services. Maintaining profitability by selling higher priced models or service contracts was the key mantra for all vendors to survive in a volatile market dynamics last year however from a vendor prospective the trend of end-customer moving from Capex to Opex model is envisaged this year. Hence, a value proposition total cost of ownership build in a constructive approach with roadmaps by vendors is required to bifurcate themselves from their competitors.”

Though the Directorate General of Supplies & Disposals (DGS&D) renewal was done towards the end of October 2013, it could not generate enough demand from the Government sector. A sense of relief prevailed in the colour printer segment. In Q4, the colour printer segment observed a growth of 9% sequentially and 18% year-on-year. The top 3 market leaders in colour for CY2013 were Konica Minolta with 27% market share, followed by Ricoh (26%) and Canon (24%).