Chinese Government Makes Room for Aftermarket Supplies

[Anonymous]

Chinese Government Makes Room for Aftermarket Supplies
By: Jiqiang Rong

March 5th, 2014 The central government of China has selected four aftermarket supplies manufactures as its designated printer supplies providers for 2014 according to a February 21 announcement. These four companies are Print-Rite Unicorn Image Products, Zhuhai Seine Technology (Ninestar), Beijing Laser Hi-Technology, and Mipo International Limited.

Print-Rite and Ninestar have been on the list as designated providers since aftermarket printer supplies first appeared on the government procurement list in 2010. But this year’s selection is of much greater importance to the selected providers because the central government requires for the first time its buyers in Beijing to purchase aftermarket supplies and buy OEM supplies only when the aftermarket supplies are not available.

Our View

Before aftermarket printer supplies appeared on the government procurement list, printer OEMs monopolized the supplies market in the government sector of China. When the government made aftermarket supplies available to its buyers in 2010, it basically offered aftermarket supplies firms an opportunity to compete with OEM competitors. Government buyers still enjoyed the freedom to purchase either OEM supplies or aftermarket supplies at their own discretion.

The selected aftermarket supplies providers had been complaining that they had to fight an uphill battle with the OEMs, but still gained market share gradually. Ninestar, for instance, claimed that its shipment of printer supplies to government users is second only to HP and Canon.  With this new policy put in place, we believe that the balance has tipped decisively towards aftermarket printer supplies. When the central government buyers outside Beijing and local government buyers begin to follow suit, it will be the end of OEM dominance in the huge government printer supplies market of China. This could result in higher hardware price in China or enhanced technology barriers from OEMs to frustrate aftermarket efforts to come up with competing cartridges.

[Author]

March 11, 2014 at 11:00 AM