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Moderate decline in printing volumes

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The latest end-user printing industry survey conducted by International Data Corporation (IDC) in key Central and Eastern Europe, Middle East and Africa (CEMA) countries, reveals that the number of pages printed in home and office segments (excluding pages printed on production devices) declined at a moderate single digit rate in 2015.
According to IDC’s Printing and Document Trends in CEMA, 2016, this result is due to the impact of digitalisation of various enterprise processes.
“One of the most important observations to be highlighted from the survey is that, for the first time, end users in the business sector are reporting that the number of pages printed in the office (page volume) went down because of digitalisation initiatives,” says Mitri Roufka, programme director with IDC CEMA.
“At the same time, economic and business conditions ranked as the second most important factors influencing printing output; in the past, these were the top contributors to page-volume dynamics.”
Transformation of paper-based processes to digital is an increasingly important influencer of printing needs and the main long-term threat for hardcopy peripheral (HCP) manufacturers, as this has a strong potential to further reduce enterprise page volumes, which will in turn impact demand for consumables (ink and toner).
“The feedback we are getting from end users is clear. The majority of organizations have either already started digitalization initiatives or are planning to do so in the next one or two years,” says Roufka.
Print manufacturers should look to this trend as an opportunity; they need to be prepared to support clients with such initiatives and push smart multifunctional peripherals (MFPs), as well as document and workflow-related solutions. Their current advantage is that they are most likely to be asked by the client to help them with such initiatives, but they also need to be proactive and make clients aware that they have the capability to provide such solutions.
“Most vendors’ acquisitions or areas of development in the last five years have been focused on software solutions — now it is the right time to take advantage of those new capabilities,” adds Roufka.
The preliminary results of IDC’s worldwide page volume tracker indicate that worldwide page volume in both the business and home segments is slightly declining, not only in mature markets, but also in other emerging markets than CEMA (Latin America and Asia Pacific). Evidently, established companies are continuously seeking to reduce their dependence on paper documents, while newer organizations/start-ups are either already “born” digital or are building their processes based on a minimised need for paper.
Revenues from print services (basic print services and managed print services) in the CEMA region are expected to total $1,62-billion in 2015, which represents 9,4% growth compared to 2014 (preliminary figures). This is more or less in line with worldwide growth rates. Given the fact that the CEMA print services market is still quite small compared to Western Europe, there is definitely great potential for print services providers in the region.
Another important statistic is that the 10 largest markets in CEMA represent over 82% of total print services revenues in the region. This means there is still a large pool of countries where the print services opportunity is nearly completely untapped. In order to develop this business, however, vendors need to be more proactive in educating both their channel and potential clients on the benefits that can be realized.
The total value of the consumables market (toner and ink supplies) in CEMA stood at $6,73-billion in 2015, which includes original equipment manufacturers (OEM), compatibles, and refilling and counterfeit supplies (supplies used on production devices are not included).
This figure reflects an overall year-on-year decline of 6,7%, with toner sales down 6,1% and ink dropping 9,9%.
The main observed trend in the consumables segment was slight growth in the share of compatible cartridges at the expense of originals and refills, which was driven by the growing popularity of cheap “clone” cartridges (new built cartridges) across the region.
Nevertheless, the decline of the consumables segment was smaller than that of the hardware segment, which indicates that although end users refrained from purchases of new equipment, their printing needs did not change much — although they are increasingly looking to reduce printing costs.
While worldwide shipments of hardcopy peripherals (A3/A4) declined in 2015 by 6,7% in volume and 4,9% in value, HCP shipments in CEMA contracted year on year by 19% in volume and 19,6% in value, to 10,5-million units.
Four key factors combined to form a perfect storm that inhibited market performance last year: low oil prices, exchange rate fluctuations and depreciation of most local currencies, slowing or declining economic performance, and political instability and military conflicts.
Interestingly, the world’s mature markets — Western Europe, US and Canada — performed much better than the so-called “emerging” geographies, including Latin America, Asia Pacific, Eastern Europe, and the Middle East and Africa, as shipments in those mature markets declined (combined) by only 2% in volume, but increased slightly in value.
This dynamic reflects an ongoing shift to higher-value product categories, in particular from single-function to multi-function, from mono laser to color laser, and, particularly, demand for inkjet devices shifting from the home segment to the business segment.
Additionally, the emerging markets remain more price/cost sensitive, and turbulence in the business ecosystem typically results in buyers cutting back on the acquisition of new printing devices.
In Central and South Eastern Europe, a number of countries — including the Czech Republic, Poland, Hungary, Slovakia, Romania, and Bulgaria — posted growth of hardware sales in 2015, sometimes into the double digits. The market’s performance in this region was primarily driven by better economic conditions, a reviving SMB segment, and greater tender activity in both the private and public sectors.
On the other hand, the market for printing devices in the Middle East and Africa (MEA) declined year on year by 16,3% in volume and by 16,6% in value in 2015. The decline in the Middle East was slightly higher than in Africa, mainly due to poor results in Turkey and the UAE.
Shipments in the combined Russia/Ukraine/CIS region suffered the most in CEMA, falling more than 37% in volume and almost 45% in value. In some countries, such as Moldova, Tajikistan, and Uzbekistan, market value dropped by more than 50% year on year.
The A3 colour laser segment and production printing devices were the only two segments that continued to grow in 2015 in terms of volume. The other key trend to be highlighted for 2015 is that contractual business was less affected by unfavourable market conditions than transactional business.
One result of this was that the A3 laser segment continued to outperform the A4 laser segment, as the majority of A3 devices are delivered under some kind of contract while A4 business remains highly transactional.
From a product technology point of view, the inkjet segment declined less than the laser segment in both volume and value; contrary to the trend seen in the last six years.
While demand for consumer inkjet devices continued to drop, business inkjet sales remained at almost the same level as in 2014. This reflects the fact inkjet technology adoption in the CEMA business sector is increasing, an observation that emerged from a recent large end-user study conducted during February and March 2016 in CEE and MEA key geographies.
In IDC’s “Printing and Document Trends in CEMA, 2016” over 50% of respondents said they are planning to increase the share of inkjet devices in their printing fleet. This intent was cited even among Russian organisations, which have traditionally shown a strong preference for laser technology.