Survey: The X factor that drives print in India
Ramu Ramanathan and Tanvi Parekh
Tuesday, October 25, 2011
Print data is widely disparaged in India for getting most things wrong; and its a wonder that some of us get the number-crunching right.
Our aim was to grasp what are the underlying trends that in the Indian print industry. The following text provides a snapshot of the Indian print market in an easily digestible format.
The top trends in the Indian industry with 42.5% of the respondents backing it, is: the double-digit growth rate at which the industry is galloping. Increased domestic consumption is being driven by a strong economic growth in the region. It has increased the demand for printed products in India.
Today, buyers and suppliers consider India and China to be the two most important markets for potential growth.
2011 has been a mixed year for printers in India, with the fear about rival technologies taking market share giving way to an acknowledgement that print still has a place at the communications industry table –which has meant the past 12 months have seen a good deal of shuffling around as key players try and work out where they sit and how much their price could be.
Raw material input costs, cut-throat pricing pressures and cost containment are the most pressing immediate business concerns for the industry. This is largely due to recent volatility in the currency market, which has pushed up operational costs. Companies are therefore taking various measures to contain costs, including investment in sophisticated technologies such as robotics to increase efficiency.
The industry is focusing on increasing awareness among the general public of the advantages of print. We believe, this will help print clients to drastically reduce their operating costs.
For printers in general, technology adoption seems to be pretty constant with respondents (32.2%) stating, the print industry is investing in new machines, new factories. An impressive number (18.8%) feel there has been a movement in outreach programs by printers; who are trying to tap new clients and at times pour money into hosting client events, match-making sessions and trade exhibitions. What has also expanded (18.1%) rapidly over the past 12 months, is the creation of new print applications.
Perhaps print applications were being created earlier, too but now more and more print firms are articlating it. We noticed this with the PrintWeek India Awards. Many new firms sent in entries and at times it was difficult to guage if the entry was from an award-winning veteran print firm; or a first-time entry.
There is good news. Print is rated as one of the most hard-working industries (14.1%), and in terms of its contribution (11.8%) to society. This includes production of school books, packaging for medicenes and food. More and more print firms seem to have more cash to spend on print than last year.
The not so good news is unhealthy competition (29.1%) and bad debts (26.7%) and lack of government recognition (20.4%). Print firms seem to be offering a wide range of services, and even though there is enormous consolidation in the marketplace, respondents said that most of a company’s resources is frittered in managing the business.
There is evidence that more printers are bringing work in-house, instead of outsourcing. Again, most of the people we’ve been speaking to say they are intending make this move in the next 12 months. And yet, there is an appalling lack of awareness (1.4%) of what constitutes good printing practises. A mere 12% opt for standard SOPs and audits.
What is genuinely alarming is, in spite of the hullabaloo about "going green", only 1.5% of the respondents say it constituted any part of their business. This, low quotient, however suggests that these determinants may be increasing and that those in the less-than-5% group may up their work in these departments rather than cease it altogether.
The heartening news is, in spite of the low self-esteem and poor in-house plant processes, the fact is print CEOs are spending more money than they did in previous years on new machines (and pre-owned kit). On top of that, a majority of respondents we spoke to said: the new segments where print firms are plan to up their spend in the next two years is: digital, packaging, book printing, label printing and wide-format printing.
The print numbers for India as per the latest PIRA report are as follows
Region-wise share of print in India
- North India: $8.6bn – 34%;
- South India: $7bn – 28%;
- West India: $6.7bn – 27%
- East India: $2.7bn – 11%.
The segment-wise share of print in India
- sheetfed: 36%;
- coldset: 20%;
- flexo: 11%;
- heatset: 9%;
- letterpress: 7%;
- gravure: 6%;
- digital: 5%;
- screen printing: 4%;
- wide-format: 2%.
The estimated future growth
- digital: 35%;
- wide-format: 20%;
- web-offset: 12%
- sheetfed: 12%
At $25bn (estimated in 2012) and a robust double-digit growth, the Indian print industry is a solid sector. And long may that continue. The only thing that can prove to be a stumbling block is the disinterest among the print fraternity, as indicated by our survey.
The ball is in our court to create a profitable offering.
And if that’s not a good reason to get excited about print, we don’t know what is.