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India HCP market sees biggest ever declines

August 14, 2020

Following the disruption in supply chain and demand shock due to COVID-19, the HCP industry observed the sharpest year-over-year (YoY) decline of 59.6%, to date according to the latest IDC Worldwide Quarterly Hardcopy Peripherals Tracker, 2Q20.

India hardcopy peripherals (HCP) market registered shipments of 0.34 million units in 2Q20 (April – July 2020), with a decline of 47.9% quarter-over-quarter (QoQ) as the country remained under complete lockdown through the first half of the quarter 2Q20.

On the inkjet segment, supply chain challenges along with the pan-India lockdown at the beginning of the quarter led to a sharp YoY decline of 46.7%. Vendors faced supply issues mid of the quarter as their manufacturing hubs in China and Southeast Asian countries grappled with the unprecedented global surge in demand for inkjet printers from the Home segment. Within the inkjet segment, the ink tank printer segment noted a YoY decline of 41.1% while the ink cartridge segment declined by 59.1% in the same period.

The laser segment (including the copier segment) suffered an even sharper YoY decline of 74.5% following the drop in demand from the commercial segment. In the second half of the quarter, once the lockdown was lifted, some corporates and SMBs resumed operations at their offices with a limited workforce but a significant majority of the organisations continued operating through work from home. Additionally, unfavourable market conditions that forced businesses to cut their expenses, led to the sharpest YoY decline to date, IDC explained. For similar reasons, the laser copier segment too witnessed its highest-ever YoY decline of 65.1% to date.

“With the onset of partial uplift of lockdown across the country from mid-May onwards, consumers preferred to procure from e-commerce channels. This resulted in significant growth in online channel contribution to the overall sales by more than 15 percentage points,” said Bani Johri, Market Analyst, IPDS, IDC India.

“Within the HCP market, demand for ink tank segment rebounded significantly, and quickly once the lockdown restrictions on non-essential item sales were lifted. Also, within the overall inkjet segment, demand for Wi-Fi and multi-function printers witnessed a considerable increase from the home segment. On laser printer front, single-function printers captured the highest ever market since 3Q12 as small offices and SMBs purchased these printers to manage their operations from home,” added Johri.

Top 3 Brand Highlights:

HP Inc. maintained its leadership in the overall HCP market in India with a market share of 29.8% while its shipment declined by 73.7% YoY. It faced severe supply issues as its manufacturing units are largely based out of China. While the laser printer segment declined by 87.4% YoY, the inkjet segment declined by 52.2% YoY. HP regained its 2nd position in the inkjet segment with a market share of 31.4% owing to its strong volume in ink cartridge-based printers. On the laser printer (excluding copiers) front, HP continued to maintain its number one position with a 34.4% market share.

Epson maintained its 2nd position in the overall HCP market, following HP Inc. very closely with a market share of 29.1% and a decline in shipment by 49.4% YoY. Epson too, faced severe supply issues as its manufacturing hubs had to cater to the surge in global demand with limited manpower. Epson noted a market share of 40.6% in the inkjet segment as it lost out some share to ink cartridge models from HP and Canon which were preferred by a section of home users who did not want to make a high investment in ink tank printers.

Canon recorded a YoY decline of 46.7% while maintaining its 3rd position in the HCP market and capturing a 25.6% unit market share. In the inkjet segment, Canon declined YoY by 37.5%. In the overall laser printer segment (including laser copiers) Canon replaced HP to occupy the market leadership position with a market share of 33.2%. In the laser copier segment, although Canon declined by 62.7% YoY, yet it continues to lead the copier market with a 32.0% unit market share.

“Due to strong demand for home printers for remote learning and the upcoming festive season sales, IDC expects a strong 3Q20 for ink tank printers barring any major supply issues. IDC also expects the laser printer to show signs of recovery in the second half of the year, as organisations of all sizes continue to open their offices in a phased and gradual manner.

“Isolated lockdowns by different states may have some impact on 3Q20 but it is not expected to cause any major setbacks for the market. E-commerce share will continue to grow, however, brands need to adopt an omnichannel strategy and not ignore their offline channel partners as they will be the main catalyst for recovery and growth in these crucial next few months,” said Nishant Bansal, Senior Research Manager, IPDS, IDC India.

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