Maturing stationery industry

Conventionally, stationery stands for a wide gamut of materials like paper, office supplies, writing implements, greeting cards, etc. However, as per the contemporary definition of the term, ‘stationery’ more specifically relates to materials used for formal or personal correspondence. The Indian stationery industry is worth Rs 4,000 crore, comprising of a wide variety of products and categories. It can roughly be classified into paper products, writing instruments, computer stationery, school stationery, and office stationery. Though the Indian stationery industry is dominated by local stationery players, a large number of organised players are now entering the industry. 

 

Current scenario

The Indian stationery industry is highly scattered and is largely dominated by the unorganised sector and the situation is quite alarming for the organised players industry. Factors like lack of modern production facilities, unorganised nature of functioning, marginal demands, government policies and international competition are largely contributing to the slow growth of the organised stationery industry in India.  

However, the industry is now showing signs of organised growth, as a result of tremendous increase in the demand for the stationery products in India. This demand can be attributed to the entry of a large number of international brands in India. The Indian stationery industry is largely shared by the educational and office stationery products. Particularly in the school stationery category, the percentage of schoolbooks captures the bulk of the market. The national market for syllabus-based books is estimated at Rs10 billion and is growing at 20 per cent per annum. Relatively, other departments from the stationery industry generate more or less equal percentage of growth.

As compared to the Indian market, the international market involves more innovative trends. With the emergence of international brands like Faber Castle, Kores, Maped, etc. in the Indian market, the market has become highly competitive in both quality and price. Mr Sivaraman Balakrishnan, Deputy Manager Marketing, Crossword Bookstore says, “I think, the present day consumer is educated, has a knack for experimentation, has the capacity to spend and above all, wants value for money. Given the scenario, the penetration of more and more luxury brands and consumers opting for them is no big surprise. As for local formats, well they have their own share of market and will continue to exist.” According to Mr N.V.Sivakumar, leader retail practice, PricewaterhouseCoopers, “Consumers want an increased variety of choice in stationery products ranging from private label/branded, domestic/international, etc. As companies expand their footprint, it is essential that they provide their workforce with the right tools to make their jobs easier — pens that last, highlighters that do not dry up, file folders that are durable, etc.  It is important to ensure that products are of good quality and priced competitively.”

Though competition drives the market crazy for new products, it has its positive side too, as this way the consumer can get the best product he wishes for, in different price ranges. Indian buyers are price sensitive but are ready to spend more if dependable products are offered. However, the buying behavior of the consumer towards stationery products is that of rawness about the variety of products or the correct usage of the product available in the market. This is because the share of the unorganised players in the industry is much higher than the organised players.

Change over to organised

India is constantly challenged by the growing competition, especially from neighbouring countries such as China, Indonesia and many other countries that supply higher quality products, as compared to India. The Indian stationery industry is highly unorganised; the share of the organised players in the industry is lesser than the unorganised players. Unorganised retailers are still expanding and control the major market share. According to Mr Saket Bhatnagar, Principal Consultant, Technopak, “The Indian retail industry is evolving. Three international office supplies giants – Office Depot, Staples and Office 1 Super Store have entered the Indian market. Office 1 Supermarket already has stores operational, while the other two will open up soon. Looking at the factors for growth in this industry, there are high levels of corporate activity in the country like more and more offices being opened up and offices are the largest users of stationery products. Secondly, brand consciousness has increased substantially among the consumers. People want brand promise and are ready to pay extra for it.”

Branded products are expected to have high quality because the Indian stationery market leaders have to face competition not only from the local players, but also from other competent brands. Adding to it Mr Balakrishnan says, “The Indian stationery industry has witnessed phenomenal growth over the past couple of years. Growing beyond its set boundaries of writing instruments, stationery today, includes a huge gamut of products across varied ranges. Further pushing the industry on a growth trajectory is the influx of big and renowned players. Even the high-end luxury brands, which were earlier limited to the recesses of select showrooms, have made their way into larger retail outlets, thus finding more takers.” The consumer is treated like a king today. Also, the government focus on increasing education everywhere has boosted the growth of the stationery market in India.

 

Prominent players

In India, though stationery is largely retailed through local or small players, the industry is gradually moving towards the organised mould. Some of the key players in the organised stationery segment are Crossword bookstores, Books and Beyond, Cartoleria, Office 1 super Store, Depot, Odyssey, Write Site, Luxor, Office Linc.

Crossword bookstores came into being on October 16, 1992 as an IBH Publications initiative. In the year 2000, it was bought out by Shopper’s Stop. Currently, Crossword has 53 stores across 13 cities. Cartoleria Retailing Private Limited is promoted by Gujarat has a mission to accomplish stationery retailing with pan India operations. The company operates 12 stores at present. Indo Rama Retail Holdings Pvt. Ltd (IRRHPL) has forayed into the Indian retail space in collaboration with a US-based company Office1 Superstore International. Presently, there are 7 stores functional in Delhi / NCR, Chandigarh, Chennai and Pondicherry Another player, Depot, is one of the youngest brands from the Future Group stable. Led by Mr Kishore Biyani, the Future Group operates through six verticals: retail, capital, brands, space, media and logistics. In 1995, Odyssey opened its flagship store in the southern suburbs of Chennai in Adyar. Odyssey is a fully owned subsidiary of Deccan Chronicle Holdings Limited. Today, Odyssey operates through 31 stores in 13 cities with 1.76 lakh sq.ft of retail space under its operations. Books & Beyond, a new vertical of Spencer’s Retail launched its first store in 2007. The company has aggressively extended the footprint of Books & Beyond ever since, with stores in Kolkata, Chennai, Bengaluru, Hyderabad and Chandigarh. The latest Books & Beyond store was launched in Jamshedpur on November 7, 2008. Write Site, a novel concept in retailing, is an exclusive showroom for writing instruments. It showcases a range of global products from Sanford and Reynolds, in a smart yet easy ambiance. Write Site presently has operations in Chennai, Guntur, Hyderabad, Noida, Gurgaon, Indore and Ahmedabad.

Headed by Mr D.K.Jain, LUXOR started manufacturing writing instruments in India in the year 1963. Today, LUXOR is the brand leader in the Indian writing instrument industry, having a market share of over 20 per cent, with an excellent network of dealers and distributors. LUXOR was formed in the year 1991. Another prominent brand is Office Linc, a retailing arm of Kolkata-based Linc Pens & Plastics. The company has 10 ‘Just Linc’ stores all over India.

 

Stationery types

Stationery products are required by everyone from school to organisations. The target consumers of this industry are schools and offices. The stationery industry can be classified into two sectors.

School stationery: It consists of a wide range of stationery products used by teachers and students in the schools. It includes popular stationery products like notebooks, erasers, pencils, rulers, sharpeners, writing boards, exam boards, graph book, pencil boxes, geometry boxes, notebooks covers, glue sticks, maps, children paper clips and binders, pencil grippers, calculators and many more.

Office stationery: Products include correction products, book/ magazine racks, business organisers, card holders, cash boxes, clip boards, dampers, desk calendars, desk organisers, document holders, glues, glue sticks, letter openers, message pads, stick ups, plastic paper clips, paper trays, paper weights, pen holders, trays, stands, pen holders, cases, pocket planners, punches, rubber bands, scales, rulers, scissors, stamp pad inks, stamp pads, staple removers, staple pins, staplers, tapes and dispensers, telephone diaries, etc.

Writing instruments: It includes ball pens, correction fluids, pens, tapes, synthetic, PVC  Erasers, fountain pens, gel pens, highlighters, inks, markers, 0.5 and 2 mm pencils, micro tip pens, pen refills, pen sets, pencil leads, roller pens, sharpeners, marking pens.

Computer stationery:  It comprises of printer toners, computer CDs, floppy disks, computer paper, printer ink, printer cartridges, CD covers, etc. 

 

Threats to the industry

  • Lack of awareness - Due to lack of desire and unawareness about the products, the consumer is used to buying whatever is available at the local stationery shops.
  • Competent local players - Indian local players hold the major share in the stationery market, which is a challenge for Indian organised players.
  • Price variations - Local players, without any proper billing, sell products at cheap prices, whereas, organised players have to go through proper billing and taxation, which creates a gap between the prices of the two sectors. 
  • Low cost products- The stationery products are low cost products and the advertising spending is very low in this industry; it is difficult to attract the customers to buy a particular product.

 

Target location                                                           

Stationery retailing is a profitable business. Finding the right location at affordable rent is one of the key successes in this business. Which is the best location for a stationery store?

Answering this question Mr Vikram Mane, CEO, Cartoleria Retailing Pvt. Ltd says, “Location is still very important - it is still sourced from the nearest place to your home, especially in the case of students’ stationery. Mothers have a say in buying till say ten years of age of the student, but their stationery requirement is the highest till that age due to loss or damage. For this age group super stores located in their locality selling stationery could be the best suited. For office stationery, you need to go to their doorstep and sell.”

Commenting on the importance of selecting the ideal location, Mr Balakrishnan says, “Appropriate location is decided keeping in mind the target group and the range of products on offer. In case of Crossword Bookstores, malls and high streets are the perfect bid.” Adding to this point Mr Srivastava says, “The ideal location for a stationery store will be firstly preferred on high streets surrounded by commercial complexes and secondly within office/college complex and lastly in malls.”

 

Future prospects

Stationery is such a product which is required by everyone from schools to organisations. With the increasing number of schools being built, the education sector is rapidly becoming an important target group for stationery retailers. Mr Srivastava says, “As companies expand their footprint, it is essential that they provide their workforce with the right tools to make their jobs easier — pens that last, highlighters that do not dry up, file folders that are durable, etc.  It is important to ensure that products are of good quality and priced competitively.” Adding to it Mr Balakrishnan says, “With an influx of newer brands, national and international, promising consumer-buying patterns and large amounts of money being pumped into the market, the scenario of the stationery industry in India looks pretty promising.” The invasion of international players with positive and healthy outlook will help domestic players to upgrade themselves, and technological improvements and the liberalisation in government policies will help in changing the whole global scenario. Thus, it is apparent that irrespective of the market share of the organised and the unorganised sector, the Indian stationery industry is anticipated to grow constantly.

The organised Indian stationery industry is at a nascent stage. Though many organised players have entered the market, the demand for non-branded products remains the same, in comparison to branded products. Is the Indian stationery industry transforming from being an unorganised industry to an organised one?
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