Epson India 'thINK's to wean away market shares from HP, Canon

PUNE: Preferring to call itself as a digital imaging company, Epson is trying to change the game of consumables and printer market by launching new products and new brands.

Affordability is the mantra that Epson is getting ready to chant. While it sells 1,25,000 inkjet printers, the sale of Epson’s own cartridges is only 35 per cent of that lot. Printer to ink cartridge sale ratio in other countries is 1:2 or 1:3 while for India it is 1:1.

Speaking on the sidelines of the launch of its low-cost cartridges in the ‘thINK’ range and six new models of printers in Pune, Ramprasad reveals, “Henceforth, all our printers (including for the entry category) will have individual cartridges. So customers can save the unnecessary cost of buying the three-cartridge pack when one gets over in the case of colour inks.”

How does Epson India plan to realize the target of 20 per cent growth over last year’s base of Rs.240 crore as well as higher market shares in MFD (Multi-Functional Devices) and Inkjet segments?

“Spur consumption of ink cartridges by hitting on affordability,” says S M Ramprasad, manager, Consumer Products, Epson India, as he reveals, has a two-pronged strategy for upping market shares in India. Epson currently commands 23 per cent share in a 5.5 lakh single-function printer market and 10 per cent in the 2.5 lakh MFD terrain.

Ramprasad is keen to drive the conversion to 1:1.5 mark and expects to see that happening in the next six months. From Rs 495 for black ink and Rs 735 for colour ink, prices would now be pruned to Rs 250 per cartridge for Epson’s new range. This in comparison to the rates of Rs 750 and Rs 660 (HP) or Rs 1055 and Rs 1350 (Canon) for black and colour inks respectively shows clear signs of playing the price strategy.

“Our strategy will be of clear advantage to the home user segment who are not volume users and don’t use the complete cartridge at least for six months after purchase, by which time it dries up. According to a research that we did, cost and refill burden is thus, a key deterrent to the consumables market. With this strategy, the per page cost of black cartridges for Epson would be at Rs 1.48 (Rs 2.94 for colour) against that of Rs 3.75 (Rs 5.23 for colour) for HP or Rs.2.45 (Rs 2.50 for colour) in case of Canon. We are eyeing the shares of HP and Canon and expect migration to happen now,” elaborates Ramprasad.

The market response so far in nine cities that have witnessed the launch of the ‘thINK’range seems to tally his optimism. He adds, “It has been received as a good tool for channel partners most importantly. Numbers after the next six months would tell the real story.” He denies concerns over a dent into profitability with these price cuts and believes volumes will make up for that.

Epson is clearly getting aggressive in the inkjet segment. It has put in restructuring efforts in the distribution and channel front and is eyeing the No.1 slot that is currently occupied by HP. “We are the ace player in projectors, photo printers already and have overtaken Canon in the inkjet segment last year at the second rung. Now we aim for the No.1 throne,” gushes Ramprasad.

Epson’s share today in the Rs.1000 to 2000 crore consumables market stands at 15 per cent and interestingly it doesn’t consider threats from HP or Canon in this space, “Competition here majorly is from the unorganized segment.”

While price is one part of Epson’s two-pronged strategy, channel strength is the other focus area. It plans to fortify its distribution force by ramping up the second layer in its channel footprint called ECPs from 2,300 to 3,000. Its first layer called EBPs (Epson Business partners) stands at 52 today that the company deems substantial for now. “We will use a combination of push and pull factors while working on brand awareness and channel friendly policies. Our aim is to garner both the shelf and the real consumer space.”

Commenting on the Indian market he says that while it is substantial in numbers, it hasn’t caught up on the value side yet. He opines MFDs, lifestyle products like picture mate printers and gizmos to be the areas of growth ahead. “We have a lot of products in pipeline for all these categories and are going to launch a MFD in November. We aim to match the 50 per cent growth in the MFD category.”

Does this mean an obituary for the conventional DTP (Dot Matrix Printers) or Single Function variety? “No, while SFD category per se will be static, Epson will continue to grow at the expense of the competition. I don’t think DTPs will phase out because every product has its own customer base, more so in case of a market like India which won’t witness a disappearing act.”

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