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Overview the Copier Market in India Is Valued at Rs. 850 Crore and Is A Overview The copier market in India is valued at Rs. 850 crore and is a highly competitive one. The market offers huge potential as the overall penetration of copiers hovers just around 26%. The market is dominated by a few but strong players like Xerox, Canon, (Ricoh) Gestetner, and HCL Toshiba. State-of-the-art technology and international range of machines are being introduced on a continual basis by each player in the market, in order to - counter the technological obsolescence - address varying needs of end-users, especially those from the IT sector The biggest differentiators in the industry are the penetration and the distribution strength, areas in which Xerox has built up a considerable edge over other players in the market. Efficient after-sales-support, which is closely linked to the distribution strength, is an imperative for any marketer, given the kind of wear and tear a copier typically goes through. The copier demand has been, to a large extent, fuelled by the growth in the services sector, with banks and multinational companies leading the way. The future is likely to be in developing India as a manufacturing base and in providing comprehensive services to customers. Demand Drivers: Though the demand for paper oriented office equipment products like facsimile, photocopiers, and printers is considered to be on the decline with the advent of Internet and efficient electronic data transfer, marketers are ruling out the possibility of a paperless office in India and see a huge potential for their product range. The drivers for demand are: - Government: Government organizations are large buyers of copiers, as the bulk of their daily work requires complex documentation. Most of these organizations are over staffed, and thus generate large quantities of hand- written paper, copies of which have to be stored in multiple locations. Also Government organizations haven’t yet responded in earnest to electronic documents and thus have not seen a considerable decrease in copier demand. The potential for copiers is relatively high in this segment as a typical Government firm seems to have a need for decentralized copiers (a separate copier for each department). - Service Industry: Among the non-government organizations, the most paper oriented is the service industry, like banks, which requires a greater degree of documentation. However, this market is declining steadily. - Jobbers: This is the segment of small and medium enterprises (SMEs). It comprises both corner shop photocopying services and full-fledged documentation management centers, servicing retail customers. Metros and active business areas have a high concentration of Jobbers, who service the retail customers. Copier companies consider this segment as steadily growing in size, and hence are setting up business centers and franchisees to meet the documentation needs of the retail customer. - Corporate: This is an important segment for any marketer (comprises IT and non-IT companies: both MNCs and non-MNCs). This segment is characterized by a comparatively higher penetration of the Internet. Therefore, to survive in this segment, any marketer needs to be customer service oriented as well as quick enough to introduce the latest technology to meet ever-changing end-user requirements. This segment, typically, seeks for a multi-task device that can design, transmit, store, retrieve, colour, print, copy, merge, scan, and fax etc. The Digital range of copiers (multi-task / multi-functional ones) are likely to have a great potential in this segment. Increasing market pressures have led to slicker advertisements, brochures, user’s manuals, and proposals, which in turn have influenced the demand for colour copiers. As against the rest of the user segments, both the colour and digital copier segment are growing in this segment. Though the small office segment (SOHO – Small Office Home Office) is largely a Printer-oriented one, it offers a good potential for combo machines that can print and copy, and multi-task / functional copiers. Long-term value, superior technology and comprehensive customer support are the universal themes for any marketer to survive in this market. Superior quality of copy/print, high levels of network compatibility, and higher speed are other key factors one would look out for in a copier. Market Structure The copier market, product per se, gets classified into two basic categories, i.e. Analog and Digital. While Analog copiers are Black & White machines, the Digital range comes in both B&W and Colour. Analog copiers, still, account for the majority of the market, i.e. 90-95%, while the Digital range is at its nascent stage. The market is equally split between the black & white and colour copiers, with the latter gaining ground recently. Digital copier, unlike Analog, can be upgraded to local printer, fax system, scanner, so that it can be used for network printing, sending facsimiles, scanning etc. As per the product architecture, the market falls into three categories. They are basically low-end, mid-end and high-end copiers. The low-end of the market comprises both personal and low-volume machines, where the copying volume, typically, would be in the range of 5,000-10,000 copies/month. While the mid-end copiers are used to copy 10,001-30,000 in a month. The high-end copiers are capable of delivering more than 30,000 copies in a month. Copiers are, now, available in a wide range of speed to meet the copying volume, a user typically have i.e. speed ranges from 4 copies/minute (entry-level personal copiers) to 35-40 copies/minute (high-end, bulk copying). The mid-end copiers (20 copies per minute) account for a larger share of the market. Xerox, as the market leader holds about 58% of the market, while Canon is an aggressive follower with 18% and the remaining being accounted by other players. Xerox ModiCorp (formerly Modi Xerox), generic to photo copiers, has a dominant presence with 50-60% of the market share in black and white copiers and an even more stunning 70% market share in color copiers. Canon, having entered the Indian market in 1997, has been very aggressive in its approach and cornered about 18%. The company’s competitive pricing policy has impacted the overall margins of the copier market adversely. Canon is followed by Gestetner (Ricoh), HCL Toshiba and Kilburn Reprographics. While Ricoh is quite well known for its being an aggressive price warrior, Gestetner intends to further strengthen its dominance in Government Organizations and aims to become a production base for its parent company. Range Price Company’s presence In the Company Product Range(Rs.) market Analog & Digital Market leader on an overall basis 45,000 – 1.5 Xerox copiersLow/Mid/high- Government and Corporate crore end segments Analog & Digital 40,000 – Worldwide leader, second largest Canon copiersLow/Mid/high- 10,50,000 (+) player in India Jobbers end Established player in duplicators Analog & Digital 83,000 – 15 market, strong in Government Gestetner copiers Low/Mid/high- lakhs firms & educational institutions end Latest entrant in Copiers Analog & Digital HCL 70,000 – 35 New entrant, loyal base of copiersLow/Mid/high- Toshiba lakhs corporates end Xerox Dr. B.K. Modi, who inherited a vast commodity business from his father Gujari Lal Modi, with technical and financial collaboration with Rank Xerox, UK (part of Xerox Corp USA), launched Modi Xerox in 1983. The commercial production of photocopiers commenced in 1985 in a plant setup in Rampur, UP. The plant was awarded ISO-9002 certification in '92. Recently, Modi Xerox re-invented itself as Xerox ModiCorp. Xerox now has 68% stake in the venture, and is aiming at a 100% ownership of the firm. Dr. B.K. Modi is still the chief of the venture, but is playing a diminishing role in the venture. In the early 90s, ModiCorp emerged as a vast conglomerate of the top office equipment brands in the world like Xerox, Alcatel, Olivetti and GBC. Notable among the problems that plagued Modi Xerox was the consistent depletion of in-house talent, but the company is eyeing the future optimistically, looking to leverage converging technologies. Xerox with a turnover of about Rs.490 crore, has established itself as the leading photocopier company in the country with a 58% market share. It plays a significant role in associated office equipment segments such as facsimile also with a market share of 25%. Xerox intends to adopt a holistic approach to manage a document in this age of convergence. This is truly depicted in shifting its positioning from a `document company’ to the `digital document company’, to go digital. Xerox has set up a Xerox Business Services division through which it provides complete document management services. Firms can outsource all their document requirement through XBS, which will ascertain the client’s needs, set up the required machines at client’s premises, along with manpower, supplies such as paper, cartridges and any other required services. XBS also undertakes activities like scanning and digitizing documents, such as old court records (this is a project that they have undertaken in Bangalore) and storing them in an efficient database. The company offers a wide range of copiers, which are available within the price range of Rs.45,000 – Rs.1.5 crore. This range encompasses low-end entry-level personal copiers, mid-end, and high-end sophisticated machines. Having established firmly its presence in the government sector initially, Xerox has now become particularly strong in the corporate segment. However, the company intends to expand its opportunity in the business enterprises segment, i.e. Jobbers. Xerox adopts both the direct and indirect mode of approaching the market, in order to achieve larger presence in the market. The company has an extensive distribution across the country, with over 300 branch outlets / service centers in all major business centers in India.
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