*NEWS*INDIA:HP TO OPEN 1,200 CTG STORES

[Anonymous]

Global copanies to change price dynamics of cartridge market
Jan,
2008,MUMBAI: For long, printer cartridges were either the costly
official variety or the cheap fake ones in the grey market. Now, a
third option is available. The cartridge refill market is getting
organised and global companies have entered India offering cheap and
dependable cartridges. Industry experts say this trend is likely to
change the pricing dynamics in the Rs 2,500-crore cartridge market.The
entry of large global players promises to bequeath the largely
unorganised segment with the stamp of legitimacy and customer
acceptance. Late in 2007, Australia-based Cartridge World (CW) brought
its franchisee business model to India. It has plans to open 30 outlets
by end of this month. Just last December, another company, Cartridge
Cafe, also announced that it would open 100 kiosks and stores to sell
consumables to end customers.Their idea is to provide cartridges that
will increasingly come closer to the original ones in quality, but at a
price far lower than HP or Canon. “We are a fresh new alternative
choice for the customer,” says Naveen Rakhecha, chief executive officer
for South Asia at Cartridge World.

The global chain has plans
for nearly 250 franchisee outlets by 2010, “We are eating heavily into
the OEM pie in the market,” says Mr Rakhecha. But its not a walk in the
park for a re-seller such as CW. “R&D for us is a continuous
process, as the aim is to provide to the exact yield as the OEM
products, without infringing on their patents for inks,” he says. CW is
aggressively pushing for market share with money-back guarantee et
al.With printer prices falling, manufacturers such as HP and Epson make
money on cartridge sales, which is a repeat market. But as organised
competition eats into those margins, the companies are innovating.
There is talk of fitting a chip in cartridges so that unofficial
refilling won’t work. But it remains to be seen whether the market will
accept that.

HP plans a huge marketing campaign suggesting that
its cartridges last more than a refilled or recycled cartridge and are
reliable and quality products. The firm will also open nearly 1,200
cartridge stores in the country to promote its originals in the market.
“70% of the printing technology is the cartridge and its not just a
price game but quality also matters.Hence we are forcing customers to
be educated on the refilling cartridges,” says Puneet Chaddha, director
of supplies and graphics imaging business at HP India. Alok Bhardwaj,
vice president of Canon India, says, “Customer at present seem to have
a short term view of the scene, choosing price over quality, but what
they fail to realise is that in the long term a non-original cartridge
may end up harming the validity of the original equipment.” Canon, too,
plans to increase the number of outlets to 250 in six months.
Cartridges account for 25% of the revenues for the printing major,
which its is looking to scale up to 50%.

The cartridge industry
has now even got associations such as CRTAI (Cartridge Recyclers and
Traders Association of India) and ICRRA (Indian Cartridge
Remanufacturers and Recyclers Association), both formed late last year.
Says Shashank Ruiwale, President, CRTAI,The industry body is looking to
establish a Standardized Test Methods Committee certification, which is
a specification followed by cartridge OEMs and remanufacturers
globally, among Indian players as well, apart from educating the yet
unorganised section of the industry about intellectual property matters
and technological upgradations.”

Meanwhile, ICRRA is also
working on standardisation. “The perception of the industry is bad at
present. We would want to change that in addition to approaching the
government for getting the CRR industry SSI status,” says Deepak
Jalihal, secretary. ICRRA.So where will this Big Fight in this market
lead to? Says Mr Jalihal, “There is an opportunity for co-existence in
the market in India, but for that firstly, the disorganised players
need to come together and secondly, the counterfeiters’ situation needs
to be addressed aggressively by both parties.” On the other hand, the
OEMs aren’t so sure. “Coexist? Yes, definitely, but there is question
mark on sustained coexistence,” says PV Vishwanath, HP’s sales director
for Asia Pacific.

[Author]

January 31, 2008 at 1:57 PM