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India's Role in the Global Inkjet-Graphics Industry

(November 2006) posted on Mon Dec 18, 2006

Get a glimpse into the growing graphics market in India, a country with billions of people and millions of opportunities in digital imaging.


By Michael Flippin

How long might the wide- and grand-format-graphics markets take to develop? One might think that with the advancements and price reductions in inkjet technology that the transformation could happen very quickly; however, I believe it will most likely take some time. Why? Both the retail sector and the advertising industry (including outdoor advertising) are nascent and fragmented. There's also a lack of investment in the advertising infrastructure. Many look to large, multinational corporations to help fuel this advertising investment. This in turn helps raise the quality standards of print advertising.

So what can delay this growth in the retail environment? This is complex issue. On one hand, the complete fragmentation of the retail environment (and weak competition) results in a huge, untapped market that makes India desirable to multinational corporations. On the other hand, the lack of a modern distribution infrastructure supporting the retail sector creates a relatively high barrier of entry to new companies, as well as a competitive edge to current retailers. To develop this infrastructure, the government is aware that foreign investment is required to improve the warehousing and distribution networks. Unfortunately, much of the government works to protect small shopkeepers while monitoring the entry of multinational corporations. So something has to give.

Urbanization

The move is on in India. According to the TVB School of Habitat Studies in New Delhi, India today is 28% urbanized. But that proportion is expected to double within the next 30 years. Web Consulting began to watch the effects of urbanization in China and its effects on the market for printed graphics, and we predict a similar phenomenon in India. The number of cities in India with populations of more than 100,000 has grown more than 31% from 299 cities in 1991 to 393 cities in 2001. In addition, India had only one metropolis (Calcutta) with a population of more than one million in 1901. Today, there are 35 such cities in India.

What does this mean for inkjet?

Let's not forget that the wide-format-inkjet market in the US was fueled by a local need for custom advertising. And inkjet began satisfying this need about 15 years ago during a period of consolidation in the US retail sector. A similar situation exists in India today, only inkjet technology has had more than a decade to advance and competition has forced prices to fall. Therefore, one might expect significant growth in print advertising on the back of the retail industry's transformation. But it is not that simple.

Like many other markets around the world, wide- and grand-format solvent inkjet printers have flooded the market in India. Many of these printers are made in China. But the Indian market for high-quality and high-value-added graphics printing is developing. There is, of course, the commoditized market for less than $0.25/sq ft for printed banners on inexpensive Chinese flex material. But who would want to actively compete in that market?

The far more interesting facet of this developing market is that there are shops buying Western-made printers and using quality and professional color management to woo advertising agencies and international brands to develop sophisticated advertising campaigns. This is a new phenomenon that will only continue to grow. But it will take time. It also may present geographically convenient printers with an opportunity to export high-quality wide-format graphics.

Bottom line

I don't think that India will emerge as a manufacturing center of wide- and grand-format inkjet printers. In fact, I believe that there will be—or at least that there needs to be—a global concentration of manufacturers. In many developing countries, low-cost machines and supplies have accelerated competition and the erosion of prices for printed graphics at unheralded rates. Therefore, I feel that India, unlike China and more like Korea, will emerge as one of the leading wide-format-printing hubs of the world—possibly even with flatbed inkjets. And that will make this runner up worth remembering.


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