China’s Ink Jet Cartridge Market:
The Aftermarket Advantage
AUG05/LYRA RESEARCH
Ink jet printers and MFPs offer a compelling
combination of low price and high-quality color capability, making ink jet the dominant printing technology used
worldwide. In emerging markets such as China, ink jets are especially popular. Chinese ink jet hardware and supplies revenue is expected to
climb from $2.4 billion in 2004 to $4.7 billion in 2008 , a 20
percent CAGR. Over that forecast period, revenue from sales of ink jet media in China will grow at a 23 percent
CAGR, and ink cartridge revenue will grow at a
CAGR of 21 percent. Chinese ink jet hardware
revenue will increase at a 12 percent CAGR. Therefore, as in most other world
regions, Chinese ink jet hardware represents a
solid business opportunity for vendors, but ink jet supplies represent an even greater
opportunity. Looking at this data in percentage terms shows that ink jet supplies accounted for 67 percent of the
revenue opportunity in China in 2004 but will account for 74 percent of the
opportunity in 2008.
Aftermarket players in China’s ink jet cartridge market have a distinct advantage
over aftermarket vendors in more developed regions of the world. In addition to
being relatively immature, the Chinese ink jet
cartridge market is unique in that many aftermarket players are already well
established in China as export companies. Now these vendors are positioned to
take advantage of the domestic ink jet printer
market as it grows by offering reliable cartridges at lower prices than those of
the printer OEMs. In contrast, in more developed regions, the aftermarket
industry did not begin to aggressively market alternatives to OEM ink cartridges until after the printer OEMs had
already gained significant mind share with customers.
It is
no surprise that printer and supplies vendors want to cash in on the booming
Chinese economy. Over the last three years, China’s economy—the second largest
in the world—has expanded by more than8 percent.