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 user 2008-01-31 at 1:57:00 pm Views: 73
  • #18935

    Global copanies to change price dynamics of cartridge market

    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.