Multifunctional devices edges over single function devices with increased adoption by small, medium size businesses as well as large enterprises. The other primary factors leading to MFP adoption are higher level of efficiency, lower total cost of ownership (TCO), high quality prints, ease of use and value the MFPs offer.
The MFP market does see a significant change and it poses a significant challenge for MFP leaders. With the changes in the global economic scenarios significantly impacting profit, along with stiff market competition, end customer’s diverse need of workflow integrations and security needs, advancement in the technologies and user preferences toward smart devices and green technologies, the shift toward the new market space in the east where the MFP leaders are going compete in future, MFP leaders have too much to tackle in order to retain their market positions. The MFP market drivers managed print services, advancement in customer service and adoption to emerging markets will act as the key pillars of revenue business models for the MFP market.
Emerging markets are still the market of the future, and still unexplored. The market needs and the business models the MFP makers deployed in the developed nations may undergo a complete change, and the industry may observe a new business which will suit the emerging markets. Focus toward emerging markets is not specific to the MFP market – there are many industries which try to focus on emerging markets. The MFP market can gain insight from other industries for a successful leap.
Despite the merger of the printer and photocopy machine industries into the MFP industry, the original pattern of print industry distribution through retailers of office equipment and photocopy machines from authorized dealers has remained relatively unchanged.
Sales of low-end devices generate little profit for OEMs, and photocopy machines are most often leased from independent dealers or directly from the OEM due to their high cost of ownership. OEMs have been acquiring / partnering with independent dealerships to increase market footage. This consolidation of MFP distribution channels is proving to be significant, because larger OEMs may further increase their influence within the industry at the expense of their smaller competitors. Most importantly, it provides a direct connect with end customers and their needs.
“Cloud computing, Big data, Mobility and Business process automation are next generation game changers. To be ahead of the race we need to have the knowledge to play the role of technical consultant/advisor to our client. In order to do so, we need to have technology and alliance partnership with leading technology players to understand the emerging technology and stay aware of the product roadmap. The future of the industry depends on how brilliantly companies drive innovation to ensure products remain pertinent to ever-evolving landscape of IoT. Ultimately, as a manufacturer, you need to think beyond print and your product needs to stand out in the market,” said, Yuki Uchida, VP & CMO, Ricoh India.
The MFP market has seen a global approach in the past over cost reductions by moving to low-cost emerging nations for the labor-intensive manufacturing process. The current tide of market demand due to mobility and the cloud, the market moving toward the emerging nations, the increased need for innovative MPS and the need for market innovations toward MFP operational technology compel the next phase of globalization in the MFP development process. By 2005, the MFP majors had started focusing on the emerging nations through their captive center establishments, initiating development outsourcing, sales office establishments, channel acquisitions and internal market analyses.
Globalization of the MFP development process could add tremendous potential for the MFP makers toward their market capitalizations. Some of the leading thought processes which have driven the MFP makers to move toward globalization of the development process include. Outsourcing non-core modules, Outsourcing market request and localization and Test process outsourcing
Market Size & Growth Rate in 2021
According to Yuki Uchida, VP & CMO, Ricoh India, “Global multi-function printer (MFP) market to grow steadily at a CAGR of over 2% for next 4 to 5 years. In India the situation is slightly better as the adaptation to MFPs from the single function printers are increasing day by day. The growing demand for MFPs from industry verticals like education, healthcare, banking, and manufacturing is the primary driver for the growth of the market. These industries have greater demand for low-volume printing, along with basic functions such as scanning and copying. Though the growth is as low as 2 – 5% in terms of unit, due to substantial technological shift, the growth of high end models will be higher, with customers showing an increased inclination towards them over entry level printers.”
“We will continue to help the printing businesses in India, leverage the potential of digital printing. The country is witnessing a rapid transition to digitization and we as a company will help fuel this transition by rolling out new cutting edge printing solutions as well as programs to aware the printing segment in India about the new trends and demand shaping up in this vertical. In five years down the line, we see our position further strengthened in the production, industrial as well MFP segment as we continue to come up with innovative technologies. We plan to launch a single solution for a new era in Digital Printing by the name of Accurio Brand. It will expand flexibility and efficiency and ensures high print quality for businesses ranging from dedicated printing houses to creative design houses. Also, company overall plan is to expand its footprint in diverse markets of India and helped printing businesses to switch to digital industrial printing to enhance the business output. Have played an Instrumental role in growing the company revenue from 100 Cr. to 500 Cr and keep the pace of double digit growth YOY,” said, Kuldeep Malhotra, Vice President Sales, Sales Planning & Communication Konica Minolta Business Solutions India Pvt. Ltd.
As per a recent report by Research and Markets – “Global Multi-Functional Printers Market 2017-2021”, the global multi-functional printers market is expected to grow at a CAGR of 3.35% during the period 2017-2021.The report mentions Xerox as one of the key vendors in this space.
“The overall printing business in India is certainly shaping up positively. The pattern of printing is evolving and changing, but the need of printing still continues to exist. At Xerox, our focus is to launch future oriented solutions and advanced level of software enabled products which go beyond peripherals to bring in very high level of security, ease of use and which can be easily plugged in to any IT customer network in order to help customers manage all the scan and print options with a view to print less. The objective is also to bring efficiency and effectiveness in the customer print environment and help them to simplify the process and also reduce wastage while improving productivity. We believe with this focus we will play a major role in the overall growth of MFDs. Overall, we are optimistic that the market will continue to grow and some of the products we plan to launch in the next couple of months will certainly make an impact in the Indian market,” said, Balaji Rajagopalan, Executive Director, Technology, Channels & International Business, Xerox India.
Key factors driving the global MFP market
“In recent years, the MFP market in India has observed unprecedented evolution and in terms of customer demands and technology developments. A rapid rise in the number of SMBs, startups and entrepreneurship initiatives has proved to be a shot in the arm for the MFP segment. The shrinking costs associated with high quality color printing coupled with increasing digitization in the country has also emerged as another growth factor for the segment ,” said, Malhotra of Konica Minolta.
“Demand for Multifunction Printers (MFPs) is increasing as they deliver enhanced functionality and productivity for an organization. Also, multifunctional devices edges over single function devices with increased adoption by small, medium size businesses as well as large enterprises. The other primary factors leading to MFP adoption are higher level of efficiency, lower total cost of ownership (TCO), high quality prints, ease of use and value the MFPs offer. Multifunction color laser printers possess true multitasking ability while also giving one the competitive advantage of color, when your work demands it. With a multifunction color laser printer, one can create, communicate and collaborate,” said, Balaji of Xerox India.
“The evolution of communication technology and automation has completely transformed the office environment. Modern day offices demand for advanced technology and customizable solutions to accommodate business specific needs. Thus, enterprises are moving towards new-age cloud based MFPs that support office automation, mobility and collaboration. This is the new driving force in the global MFP market. Besides the customer’s diverse need of workflow integrations and security needs, innovative technologies like the rapidly evolving internet of things (IoT) and user preference towards co-friendly devices are imperative factors,” said, Yuki of Ricoh India.
Key market trends in India market
“Apart from the driving factors mentioned above, which apply to the Indian market as well, we are seeing a good traction of solution enabled, secure devices in India. These days, MFPs have in-built capabilities that enable printing from cloud and mobile devices. They help workplaces of all sizes increase productivity and sustainability efforts significantly and are a true enabler of BYOD scenarios with outstanding security features. Seeing this market opportunity, we have launched ConnectKey enabled devices and Docucenter SC2020 and these devices come packed with exciting features of security, cloud and mobility and we have seen great acceptance in the Indian market,” said, Balaji of Xerox India.
“Earlier last month, Xerox launched 29 ConnectKey-enabled printers and multi-function devices with simple and secure on-the-go capabilities, cloud connectivity, and access to productivity boosting features and apps. The new ConnectKey portfolio transforms traditional printing devices into smart, connected workplace assistants that reflect the evolving needs of today’s businesses. Personalized workflows, one-touch access to the cloud and multi-layered security features are the new print, copy and fax. The family of products includes a variety of sizes, speeds and capabilities to match the needs of small- and medium-sized businesses as well as large enterprises, with a consistent user experience across the portfolio. The new products will be identified as the Xerox VersaLink and Xerox AltaLink series. The VersaLink devices are designed for small workgroups and distributed teams, and include 19 printers and multifunction printers (MFPs). The AltaLink series includes 10 MFPs designed for larger workgroups or print volume needs. Streamlined business processes, industry-leading intuitive user experience, mobile &cloud readiness and total security for both the device and the information are some of the key attributes of the newly launched products,” Balaji further added.
“The growth in Digitization has increased the demand for MPFs in the government sector as well as across industry verticals like healthcare, entertainment, education and manufacturing. Digital transformation is not only driving IT spending but is generating new revenue streams for businesses. Enterprises are now looking for an overall solution that can be integrated into their existing business environment to enhance efficiency and yield higher productivity. The compatibility of MFPs with digital tools and applications; encompassing a broader process automation that help organisation in business transformation is driving the growth of Indian MFP Market,” said, Yuki of Ricoh India.
“As mentioned earlier, the increasing demand for higher productivity and functionality by new age offices, SMBs and startups is spurring the growth of the MFP segment in India. Reduced operational expenses, TCO (total cost of ownership), consumer friendly functions and high quality print outputs are further fuelling the demand of MFP printers in the country. Emerging concepts like Wi-Fi, mobile printing, cloud etc. have also raised the demand for scalable printing solutions in offices to which MFPs come as a perfect solution,” said, Malhotra of Konica Minolta.
Opportunities and Challenges
The Indian Small and Medium Enterprises (SME) sector holds huge market opportunity for the MFP market in India. The sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades. SMEs are complementary to large industries as ancillary units and this sector contributes enormously to the socio-economic development of the country. The sector, through more than 6,000 products, contributes about 8% to GDP besides 45% to the total manufacturing output and 40% to the exports from the country. About a decade back, SMB players were conservative in their IT spending but today the situation has changed totally and firms have realized the need and significance of IT for their growth.
“A major challenge to the growth of printing industry in the Indian market is the sale of counterfeit goods. In relation to the printing industry, there is a huge counterfeit market of supplies. Xerox has undertaken various steps at a global level to help curb sale of counterfeit supplies. Another key challenge is customer knowledge. With advancement in technology, customers today want to do much more than just print. With mobile printing, cloud, advanced security features etc. becoming more popular, we will see more such application development becoming a focus area for companies in the coming times. The challenge, however, will be to see how customers adapt to these growing technological changes and secondly, how companies cater to different needs of their customers. To cater to these challenges, we regularly organize training programs for our channel partners and educate them on how the market is changing and how Xerox is looking to help consumers by building new technologies and making work simpler. We help consumers concentrate on their business rather than being worried about printing requirements,” said, Balaji of Xerox India.
“Government initiatives like ‘Digital India’, ‘Make in India ‘has led to a rapid rise in the demand of smart devices insectors like education and manufacturing. Besides, in the last few years SMEs have started investing in smart technologies to meet their complex business requirements, which has further accelerated the demand for multifunction printers. At the same time, Managed Print Services (MPS) has been able to reduce complexity and cost, and it will continue to create greater value and relevance leading to a broader adoption of the service. The major challenge that MFP manufacturers face is the sale of counterfeit consumables in the market. You need to ensure that consumers receive original and genuine consumables as fake ones lower print quality and hamper performance. Another challenge that has recently emerged is the digitization of government purchasing system through GST Application,” said, Yuki of Ricoh India.
Factors influencing market share
India is emerging as a growth engine in the global economy, owing to an unprecedented growth in sectors including IT, Retail, SMBs, government etc. which is creating tremendous opportunities for us and is also witnessing a rapid shift to digitization.
“Our MFP’s are specifically tailored to meet the challenges and demands faced by the printing business. We are also committed to offer best in class customer service support across the country to our esteemed clientele and are consistently improving our presence to fuel the digital transition in this segment,” said, Malhotra of Konica Minolta.
“Various factors ranging from strong sales channel and service network, robust product offering, innovative services to meet customer requirement, user experience, etc play a vital role in influencing MFP market share. Also, the ability of viewing the client’s business as a holistic structure made up of subsystems with their own processes and outputs, presents an opportunity to fit customizable transformational solutions at each step of the value chain thus playing an important role in expanding the market,” added, Yuki of Ricoh India.
Latest technologies adopted by brands
“Wi-Fi, IoT, Mobile Printing, LED, eco friendly printing are some of the latest technologies being adopted by printing vendors to meet the new varied demands from customers, which require maximum scalability and high quality printing outputs,” said, Malhotra of Konica Minolta.
“Wireless Connectivity and Near field-communication (NFC) has become an increasing standard on many MFPs. Along with NFC, smart/mobile printing has become popular especially with the advent of cloud based printing using apps like AirPrint, Mopria, etc. The new age printers provide users an intuitive interface with built-in Quick UI apps and offer integration with key workflow, mobility, security and remote diagnostic. For now, the industry is buzzing with innovative technologies like LED and Internet of Things (IoT),” comments Yuki of Ricoh India.
“Companies of today look for innovative solutions to simplify their business processes. We shall continue to see accelerated movement towards more integrated work flow solutions. Additionally, with mobile printing, cloud, advanced security features etc. becoming more popular, we will see more such application development becoming a focus area for companies in the coming times. Such apps will allow users to control their MFPs remotely and transmit documents to fax, email and cloud hosted services like Google Drive and Dropbox,” concluded, Balaji of Xerox India.
With the evolution and advancement of technology in the printing industry, vendors have shifted their offerings to a comprehensive solution based package than only focusing on printing, scanning and fax needs. The multi-function devices are equipped with intelligent applications to cater to the important needs of the organizations. Concepts like mobile printing, Wi-Fi, green printing & cloud have evolved in past few years.