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 user 2005-03-14 at 9:46:00 am Views: 189
  • #10849
    Mouse click is music to this copycat’s

    Back in the early 1990s when Internet technology was beginning to take off,
    the talk of “paperless office” was very common. The fashionable view was that
    electronic communication would make the costly and time-consuming printouts,
    faxes and other paper-intensive operations redundant. For most documents in the
    future would be kept on hard drives and discs.

    But the corporate world’s love affair with hard copy has proved unexpectedly
    more resilient. The development and widespread use of new technology has
    actually spurred the need for printers, albeit more sophisticated ones. Since
    most web pages are in colour, people need colour printers to print them. So the
    Internet has actually helped the growth and development of the colour-printer
    market. The higher-quality printer market has also been boosted – by the rising
    number of digital camera users, who seek better photographic reproduction.

    While the need for printers may have declined in relative terms, it’s still
    enjoying a tremendous growth in Asia’s developing markets. Though it’s a smaller
    section of a much bigger pie, it’s still good news for companies such as Fuji
    Xerox, the 75-25 joint venture of Fuji Photo Film Co Ltd of Japan and Xerox
    Corporation of the US that makes a wide range of photocopiers, printers and
    other office equipment.

    “Things have actually gone the other way,” says James Henderson, Fuji Xerox
    managing director for Asia Pacific Printer Channel Operations. “People want to
    share more information, and can access far more information on the Net today.”
    In other words, though more information is shared and stored electronically,
    there’s conversely a lot more to print and photocopy.

    Printers are split roughly into two major categories: inkjet and laser.
    Traditionally, the pricier laser printers with higher printing speeds and
    sharper results have been used mainly in offices. The cheaper inkjet varieties,
    which Fuji Xerox does not make, have been more popular for home use. “The inkjet
    system is not sustainable over the long-term,” says Henderson, explaining the
    company’s preference for the laser model.

    The printer business is different from most others because it involves
    longer-term relationships with customers. A printer may typically last for four
    years, during which replacement cartridges and support services help prolong the
    relationship. In China, printers constitute 40 per cent of sales, compared to 60
    per cent consumables, though Henderson expects this ratio to modify to 20 and 80
    per cent, respectively, as the market matures.

    Nevertheless, the company is expanding its product offer to suit the needs of
    the mainland market. Henderson says there are 18 segments in the laser printer
    market, out of which Fuji Xerox is involved in 12. The other six are found
    principally in lower-end laser printers. A new launch, the DocuPrint C525A,
    should see the company strengthen its position in the lower-end colour-printer
    market in the Asia Pacific region, where 4 million units are sold every year –
    nearly half of which is on the mainland.

    In the Asia Pacific region, SMEs comprise about 65 per cent of the customers
    (including single operator home owners, or SOHOs). The rest are major accounts,
    mainly big business and government orders. The bulk of sales on the mainland
    consist of lower-end products, often monochrome printers, but they still
    generate about 35 per cent of Fuji Xerox printer channel’s revenue. Growth on
    the mainland has been impressive, with sales jumping 92-94 per cent last year,
    though Henderson won’t be satisfied till he reaches the “magic three digits”.

    He acknowledges that these figures may have been somewhat distorted because
    of the impact of the post-SARS recovery. But he says another significant
    increase is expected this year, indicating the underlying strength of the
    market. Henderson sees Fuji Xerox becoming the third-largest company in Asia
    Pacific and the second on the mainland in terms of market share. “Market share
    in the Asia Pacific has doubled, and more than doubled on the mainland. Every
    single country in Asia showed a significant growth last year, and all of them
    have huge potential. Next year will see another increase.”

    The mainland’s rapidly growing economy also means intense competition. “The
    world’s eight biggest IT companies are focusing on printers,” he says. But being
    a manufacturer with a worldwide R&D network gives Fuji Xerox an edge. He
    says the company supplies 20-30 per cent of the world’s laser printer engines.

    Comparing the mainland and US markets, he says American consumers like
    “multifunction” products, with all the bells and whistles even though many of
    them may rarely be used, and they may include scanners, faxes, a networking
    capability and the ability to store documents. But “in China, the price is
    generally the decisive factor… They only want features that they find useful.”

    Fuji Xerox has had to reposition it brand, especially to “reinforce the fact
    that printing technology is suitable for all,” he explains. “In China our brand
    profile was too low. So the campaign tried to make people understand the whole
    product range and reinforced the fact that Fuji Xerox has invented most of the
    printing technologies in the past 25 years.” Fuji Xerox products are presented
    as premium goods even if they’re priced like their rivals’ products, says
    Henderson. But Fuji Xerox’s products are more environment friendly and save more
    power and paper.

    Actually, Fuji Xerox need not worry about brand equity. Xerox’s trademark red
    “X” logo is among the world’s top-20 famous logos, says Henderson. And then,
    “Xerox” has become a generic term for “photocopying”, much the same way that
    “Hoover” means a vacuum cleaner and “Walkman”, a personal