HP Regains Inkjet Leadership Position in India’s Printer and Copier/MFP Market

The printer and copier/MFP market in India recorded an overall shipment of 714,129 units, which was a decline of 5.8 percent on a year-over-year (YoY) based on the latest IDC Asia Pacific Quarterly Hardcopy Peripherals Tracker, August 2017. The decline was mainly due to the implementation of the Goods and Services Tax (GST) from July 1, 2017, which IDC says caused weak sell-in shipments in the second quarter, as the focus of the distributors was on clearing the existing inventory.

Prior to GST, printers used to have roughly 18 percent tax which was split between 12 percent Countervailing Duty (CVD) and 5.5 to 6 percent VAT depending on the state. However, after implementation of the GST, single-function printers continue to be taxed at 18 percent rate, while MFPs are taxed at 28 percent, which led to most vendors increasing prices of MFPs by 10-12 percent from July onwards.

“Owing to GST implementation, there was resistance from distributors in stocking inventory during May/June as the India government was only willing to give input tax credit up to 60 percent of their total GST liability against the excise duty already paid for goods purchased before July 1 (without furnishing the original excise payment receipt) resulting to a decline in overall demand,” commented Nishant Bansal, research manager, IPDS, for IDC India. “Overall, GST implementation resulted in weak sell-in shipments across the entire IT hardware and client devices market including PCs and smartphones,” added Bansal.

Overall HCP (Printer and Copier/MFP) Market

Top-Three Company Highlights

HP Inc. regained the top position in the Inkjet market with a unit share of 45.9 percent after posting a 7.2 percent YoY growth and 5.1 percent QoQ (quarter-on-quarter) growth, mainly due to its push of low-end Ink advantage models, according to IDC. IDC says HP Inc. continues to be the market leader in laser HCP (printer-based) market with 57.4 percent market share.

Canon Inc., like HP had a strong quarter with its inkjets, with a QoQ growth of 13.0 percent on the back of its strong push of its low-end PIXMA MG inkjet series. Canon also regained its number-one position in the copier market with 32.3 percent market share and registered a 13 percent YoY growth on the back of strong sales through its direct channel to large enterprises.

“Entry-level Inkjet models were the major driving force behind HP and Canon volume growth in Q2. Demand from consumers owing to GST clearance sales in smaller cities/towns were the key factors driving the demand in entry-level inkjet segment,” said Abhishek Mukherjee, senior market analyst for IDC India.

IDC says Epson was affection by GST implementation and hence took an opportunity to liquidate its excess inventory in traditional IT channels. However, with slower than expected demand during the first half of the quarter as consumers were expecting the printers to become cheaper post GST, Epson had a weak sell-in and suffered a QoQ decline of 28 percent. However, Epson is expected to rebound in the third quarter of 2017, as demand from both distributors and end-users picks up after the GST implementation.

IDC India Forecast

Markets are likely to recover in the second quarter of 2017, as IDC says July saw “good demand” for both Ink and laser printers both from distributors and end users. Historically, the third quarter of the year is also the biggest quarter, as most purchases are made during festival time in India, and vendors begin filling the channel in preparation. “Industry can look forward to strong sequential growth in inkjet printers as demand for ink-tank printers picks up owing to (the) festive and back-to-school season. Also on the commercial side, the industry can expect good demand from corporate and government deals but may see some initial pushback from SMBs (small and mid-size businesses) owing to price hike in MFPs,” said IDC’s Bansal.

For more information on IDC’s India HCP market report, contact Nishant Bansal, research manager, at nbansal@idc.com, or Abhishek Mukherjee, senior research analyst, at amukherjee@idc.com.

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