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 user 2004-03-31 at 9:59:00 am Views: 59
  • #6820

    Grey market eats away at consumables space

    Grey market activity is encroaching on the printer consumables market, forcing vendors to take action by imposing price reductions, according to IDC peripherals analyst, Su-Lin Ng.

    In 2003, the printer consumables market – comprised of original and compatible ink, laser toner and serial dot matrix ribbon cartridges – shipped 14 million units, representing a four per cent growth over last year.

    Despite a rise in the ink cartridge market – which grew by five per cent in unit shipments, reaching 11 million in 2003 – along with a stable toner market over 2002, shipping 2.9 million units in 2003, the overall market wasn’t as strong as expected, IDC said.

    “A significant reason for the small growth was due to active grey market activities since the start of 2003,” Ng said. “The main reason is due to the continuing strengthening of the Australian dollar, which has made purchasing from overseas – instead of seeking out local vendors – more attractive for grey marketers.”

    In a bid to curb the problem, HP, Lexmark and Epson are dropping prices this year, Ng said. IDC expects the price per cartridge for ink and laser toner in 2004 to drop by 18 per cent and 8 per cent respectively year on year.

    “These players make up the majority of the market and when they impose price reductions, it will have a significant impact on the consumables space,” Ng said.

    Price reductions would intensify competition between original vendors and compatible market vendors.

    And while the overall market was lacklustre, the rise in two segments of the market was a result of end-user promotions and channel incentives including bundling programs and discounts, Ng said.

    Despite the small surge in yearly shipments, IDC expects growth to continue in 2004.

    “The growth of parent markets such as multifunctional printers, photo printers and laser printers will fuel growth in the printer consumables market,” she said. “Additionally, the ongoing competition between printer vendors and compatible vendors to fight for market share will be significant drivers for the market.”