Epson President: “We’ve Beaten HP To Become Market Leader In India”

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Epson President: “We’ve Beaten HP To Become Market Leader In India”

 user admin 2014-11-04 at 11:36:25 am Views: 255
  • #41379

    Epson President: “We’ve Beaten HP To Become Market Leader In India”
    By Dhaval Valia CRN, Oct 30, 2014

    On his recent visit to India Minoru Usui, President, Seiko Epson, spoke to Dhaval Valia about the company’s strong performance in India led by the success of its Ink Tank printers.,%20President,%20Seiko%20Epson%20Corporation(1).jpg

    Could you share the performance highlights of Epson India?
    Despite the economic slowdown our Indian operations have grown at 18-20 percent CAGR over the past 2-3 years. In FY2013-14, we recorded revenue of Rs 880 crore compared to Rs 703 crore in FY2012-13. This fiscal we are on track to exceed Rs 1,000 crore, and over the next two fiscals we have a target to cross Rs 1,400 crore.

    The biggest growth contributor to our business in India has been our revolutionary Ink Tank technology printers. This technology has drastically reduced the cost per page (CPP). Epson printers based on Ink Tank offer a CPP of 12 paise per page for mono and 25 paise per page for color.

    Due to the growing popularity of Ink Tank, we have gained leadership in the inkjet market beating HP with a value market share of 44 percent versus HP’s 39 percent

    The growing popularity of this technology has boosted our market share in the inkjet segment globally. In India, we have emerged as the market leader in the overall inkjet printer category beating HP with a value market share of 44 percent versus HP’s 39 percent.

    Are you saying that HP is no longer the leader in the inkjet printer market?
    According to CyberMedia Research, in FY2013-14 the inkjet market in India was worth Rs 714.3 crore of which Epson commanded a 44 percent or Rs 314 crore share whereas HP was at 39 percent followed by Canon which had 12 percent.

    What’s significant is that from just 26 percent value market share in FY2011-12, our share in the overall inkjet market has risen to 44 percent in FY2013-14.

    What initiatives has Epson taken to further consolidate its leadership in the inkjet market?
    Ink Tank printers have been hugely popular in the small business segment. Presently, nearly 70 percent of the Ink Tank printers sold are to the SMB segment while 15 percent are sold to home consumers and 15 percent to mid-market and large enterprises.

    We believe there is a huge opportunity which we can tap in the mid-market and large enterprise segments—including PSUs and the government sector—and our initiatives are aimed at achieving these targets. We have set a challenging target of replacing 3 lakh laser printers within these customer segments over the next two years.

    The reason this target is challenging is that it requires a change in mindset among these customers who for years have been using laser printers and have a large fleet across their branches. These customers are still unaware that Epson Ink Tank printers offer the same features as lasers but at a much lower TCO.

    Another challenge is that the tendering system of these customers is centered around the lowest bid price rather than the lowest TCO of printing. For instance, an entry-level laser costs Rs 6,000 while the entry-level price of an equivalent Mono Ink Tank printer is Rs 9,000—but it offers nearly 4.5 times lower TCO than the laser printer. Also, don’t forget that most large tenders of PSUs and governments are laser technology-centric.

    Over the past 6-8 months we have been working with government buying agencies to educate them about the TCO concept in the tendering system, and we are hopeful that things will change. Once that happens we will be able to participate in large tenders which will significantly boost our market leadership.

    In the enterprise segment, we have been trying to change customers’ opinions about inkjet printing. For this we have conducted road shows in 43 cities in the past eight months. We are also running a seeding campaign and have provided more than 500 demo units to customers. After using our printers for 3-4 months, many of these customers have become convinced about our TCO and have bought our products.

    The feedback is that while Ink Tank technology is good, Epson lacks products with enterprise features.In the present context it is true. Our Ink Tank portfolio largely targets the entry-to-mid-level segments in the price range of Rs 5,000- Rs 18,000. These printers are usually meant for workgroup printing, but this is the market that commands nearly 70 percent of the unit shipments of business printers in the country.

    However, in keeping with our motto that we want everything to be printed by Epson, we are developing enterprise tools and will launch these products within the next 6-8 months.

    Our target is to replace 3 lakh laser printers with our Ink Tank printers within the SME, government and large enterprise segments, over the next two years

    Take us through the performance of and plans for other Epson products.
    Inkjet printers contributed 40 percent of our revenue of Rs 880 crore in FY2013-14, while projectors accounted for 18 percent. The remaining 42 percent came from large format, PoS and dot matrix printers.

    In the projector segment, we are No 1, and growing impressively. In the last fiscal, projectors contributed Rs 158 crore to our revenue. We are strong in the education segment which contributed 40 percent of our projector revenue. We posted two-fold growth in the home theater projector space.

    The Indian projector market is expected to grow by 20 percent from 2 lakh units in FY2013-14 to 2.4 lakh in the current fiscal. We presently have a unit share of 23 percent and value share of 27 percent. Our target is to achieve 35 percent market share in the projector space over the next two years. We expect most of our projector business to come from education, SMBs and large enterprises. While education customers are now shifting toward short-throw and interactive projectors, SMBs and enterprises are adopting high-lumen projectors.

    Though the overall dot matrix printer market is declining, we at Epson have seen this business grow at a CAGR of 12-15 percent over the past 3-4 years.

    Similarly, our PoS printer business has been growing at a CAGR of 18-20 percent. In this space, we are focusing on TM-T88-i intelligent printer which features ePOS technology that enables printing from any mobile device. ePOS enables retail stores to seamlessly increase sales counters by connecting the receipt printer to any mobile device through the cloud.

    What can the channels expect from Epson in the coming months?
    We have a large focus on education, SMBs and large enterprises for printers and projectors and are devising a vertical-focused approach aligning existing partners with various verticals. We currently have 215 Epson Accredited Partners and about 6,000 Epson Certified Partners whom we are reorganizing as per their segment focus. So far we have identified 70 partners for education, 450 partners focused on SMBs, 100 Pro-AV partners for projectors and 70 home theater projector partners.

    Our current focus is on consolidating the channel base. We are aiming to enhance business for our existing channel partners with cross-selling opportunities across our inkjet, PoS, large format printer, dot matrix printer and projector portfolio.