Reflecting on how the market for printing devices will behave in 2019, participants and analysts agreed on one thing: the main changes will occur not in the "quantitative", but the “qualitative” sphere. The market will transform, change, become more complex and segment even more.
Analyst forecasts came true. In 2019, the market size remained virtually unchanged compared to 2018. According to the results of IDC research, in 2019 the supply of manufacturers to the Russian market of printing devices decreased by 1% compared to the level of 2018 to 2.56 million units, and in monetary terms - increased by 7.7% to $696 million. According to Konstantin Makarenkov, a leading analyst at IDC Russia & CIS, vendors have turned their attention to more expensive devices with a higher probability of selling original consumables. The supply structure continues to change: the relative share of more expensive devices in both the laser and inkjet segments is increasing. Laser technology accounted for about 1.75 million devices, including nearly 1.15 million MFPs. The number of inkjet devices sold amounted to a little more than 805 thousand units, most of which are also MFPs - more than 668 thousand of them were delivered.
The conclusions of ITResearch analysts are almost identical: a total of 2.33 million devices were sold in 2019, which is 0.5% less than a year earlier. At the same time, sales in money exceeded the previous year by 6%, amounting to 541 million dollars. Leading expert of ITResearch analytical company Vladimir Mironos emphasizes: “Such a result was quite expected in the conditions of a sluggish economic situation and the absence of growth in solvent demand for most categories of consumers, but it would be more correct to call the market situation stagnation rather than recession.” In the laser segment, sales in 2019 amounted to 1.64 thousand units. After several years of decline, sales of entry-level printer models grew at a double-digit pace, the last time positive dynamics in this category was observed more than ten years ago, during the period of active growth of the entire market for printing devices. At the same time, a fairly stable shift in the sales structure towards high-performance devices continued. In Russia, laser technology still rules the ball. In 2019, 684 thousand devices were sold in the inkjet segment, 0.9% less than a year earlier.
According to CONTEXT (it considers only sales through the distribution channel), last year, many distributors and vendors "were pleasantly surprised by the full implementation of plans." Viktor Ivanov , Regional Director of Russia & CIS CONTEXT, notes that almost nothing changed in 2019 in terms of money as compared to 2018. In his opinion, the significant events in the printing market were the consequences of the merger of Samsung with HP1 and the increasingly visible presence of the new Pantum vendor: “Like all Chinese vendors, this is a very serious competitor, although, of course, it is just starting its way.”
Market players on the results and trends of 2019
Alexander Kushigin, Director of Document Imaging Solutions OCS Distribution Department, confirms Viktor Ivanov’s words: the experience of offering Pantum assemblies of the Russian assembly in the Russian market turned out to be “definitely positive”. Despite the rather limited range of devices in 2019, there was a great demand for the equipment of this company from both state and commercial customers.
"At the beginning of 2019, a fairly significant drop in activity occurred on the print market, significantly exceeding the usual seasonal decline. In some segments, the decline reached an unprecedented 50%," says Alexander Kushigin. "In the 2nd and 3rd quarters, the market gradually "went out of the peak", the 4th quarter showed excellent results, and as a result, there was moderate growth in relation to 2018 (in terms of money). These dynamics were especially noticeable in the equipment sales segment, and consumables expectedly showed much smaller fluctuations, providing the necessary foundation for a stable business. The trend towards increasing the share of the print as a service segment in 2019 has intensified. The retail sector continued to distance itself from the channel and project markets mainly through the efforts of vendors switching to direct deliveries to federal retail chains, bypassing the two-level distribution scheme. As a result, a situation often arises when the products of one vendor offered through 2 directions of sales (retail and channel) begin to compete with each other, which, of course, ultimately negatively affects overall economic indicators”.
MERLION is sure that no significant changes that could change the current alignment of forces in the market have occurred, no super-tenders have been launched, no new niches have been found. Moreover, the ongoing "digitalization" of our lives does not push the consumer to print anymore.
“However, the market has grown slightly. According to various estimates, by 5-8% in unit terms and up to 10% in money, - says Tatyana Skokova, Director of the Broadline Distribution Division at MERLION. - HP undoubtedly remained the leader, but Canon, Epson, Kyocera, Brother, and Pantum are getting closer and closer to it. If we talk about some interesting trends, in our opinion, it's worth noting HP's attempt to offer the market an alternative to using compatible supplies: instead of having the user buy a printer and print with compatible cartridges in the future, to save money, HP offers him to buy an HP Neverstop laser device with the possibility of direct refilling with "original" toner (i.e., without using a cartridge). Another interesting feature was that the CISS2 inkjet market did not grow as actively as experts and market participants expected. Apparently, this is because the device itself is still quite expensive and significantly "hits" the consumer's budget."
The head of the marketing department of Resource Media, Andrey Letunovsky, notes that in 2019 all manufacturers were looking for the best model to support the sale of supplies against the backdrop of an increase in the share of compatible supplies and a reduction in print volumes in principle. Also, they began to change the sales model for printing solutions.
“Some vendors say they will associate support for equipment for partners with the volume of purchases (sales) of original consumables,” says Andrei Letunovsky. - Someone connects the purchase of equipment and "consumables" even more tightly. It is worth noting that the model of sales of equipment with a mandatory load of consumables is starting to exhaust itself since subsidizing low prices for equipment requires significantly larger sales of consumables than many distributors can provide. The result of such a policy was an increase in prices and a shortage of some product lines.”
Among other trends, he also mentions a significant increase in direct deliveries of entry-level equipment from a vendor to federal retail chains. Such actions by vendors exacerbate competition in the segment of complex solutions: “Moreover, competition does not occur at the horizontal level (between integrators or between vendors or distributors), but at the level of properly built supply chains + services.”
According to estimates by Tariq Alhaurani, Executive Director of KYOCERA Document Solutions Russia, demand has shifted from low-cost, low-speed printing devices to devices from a more premium segment: "For example, in the last quarter of 2019 alone, sales of budget inkjet printers worth up to $100 decreased by 30%. A pronounced demand was manifested for multifunction devices, both inkjet and laser ones. This trend is especially strongly observed in the last segment, where 83% of annual sales amounted to MFPs.”
According to estimates by HP CEO in Russia Pavel Anokhin, printers accounted for only one-third of the market in 2019, the rest were MFPs: “In general, in 2019 we continued to observe a change in the structure of demand in the market. The share of inkjet printing was reduced, our country steadily prefers laser technology. The consumer chooses high-tech MFPs with a more economical cost per print. We see that this segment will continue to develop actively, and we are betting on it."
According to Boris Dubov, director of Xerox Eurasia supplies distribution department, “smart productive printing devices” became more and more popular: “As before, the main driver of growth in the segment of expensive models is government organizations and B2B companies, which make up the majority of office users in Russia technicians and more often than not get smart network printers and MFPs.” The bright dynamics of the fourth quarter, according to him, was determined by the fact that budget expenditures in 2019 were more shifted to the end of the year.
“Sales of color models increased markedly, while sales of monochrome models declined or remained unchanged," says Boris Dubov. - Speaking about printing technologies, 68% of devices sold per year are laser ones, and more than 65% of them are MFPs. In the segment of inkjet technology, the share of multifunctional models is even higher - almost 83%."
Director of Business Development and Marketing, Konica Minolta Business Solutions Russia, Arthur Sinitsin, notes that in 2019, the office printing device segment grew slightly. At the same time, the market for monochrome devices in the category of up to 20 ppm in real terms decreased - however, all other categories showed growth. A similar situation is observed in the segment of color technology - and the categories with a speed of more than 20 ppm have doubled. There is also an increase in OPS contracts3.
According to Andrei Antonov, business solutions manager for the Epson office in Russia, due to high activity in the public sector and thanks to large federal projects, the market grew precisely in the corporate market segment in 2019: “One of the main market trends is the reorientation of users from the initial price of the device to the cost of ownership. Now more and more customers consider TCO for 2-3 years in advance. It is TCO and the cost of printing that become decisive factors when choosing a device in the corporate segment of the market.”
At the same time, Andrei Antonov does not agree with his colleagues: in his opinion, the trend in Russia is shifting towards inkjet technology: “More and more partners are looking towards inkjet printing due to higher savings (fewer resource parts), environmental friendliness of the technology (lack of heating) and prospects of further development of inkjet printing, such as the development of linear printing. Also, the function of “secure printing” and various levels of confidentiality and protection of personal data are actively developing in present-day offices.” Earlier, only commercial companies paid attention to the TCO factor, but now printing savings are becoming a key factor for customers from the public sector."
Mysterious 2020
Making predictions is not a very grateful thing at all. And there is even more truth in that in the current conditions. However, market participants shared some thoughts with CRN/RE on how the situation in the market for printing devices will develop.
Viktor Ivanov noted that the first quarter of 2020 began “with stocks,” but the coronavirus led to a complete cleansing of warehouses and delays in the supply chain: “Now we understand that we just need to survive.”
Konstantin Makarenkov believes that supplies will be reduced in all categories of products: "However, given the epidemic, it is very likely to increase sales of personal devices as the relevance of remote work from home has increased dramatically."
According to Vladimir Mironos, the forecast for a small quantitative increase of 3-5% and a total volume of 2.5 million devices looks too optimistic in 2020: “Most likely, we should expect a repeat of the results of 2019 (about 2.3 million pcs.) or even a slight drop by the same 3-5%. If the situation with the epidemic develops according to the most unfavorable scenario, the negative impact on the market may turn out to be comparable to the recession in the previous crisis period: in 2015, the quantitative market volume decreased by 30% compared to the previous year.”
According to Alexander Kushigin, the main question is how sharp the decline in business activity will be and how long it will last. There is no objective answer yet: "From the obvious things, one can expect a decrease in demand in the segment of large corporate equipment, an increase in interest in personal devices and supplies to him. Most likely, new trends will become apparent by the middle of the second quarter.”
“At the beginning of the year, it was still possible to make forecasts, but after problems in China and in the current situation with coronavirus, one can only hope that the fall will not be as enormous as it seems now, that the state will help both large and small, as well as medium-sized businesses, and this will allow the market to somehow exist," says Tatyana Skokova. "Most likely, 2020 will be the year when any purchases of printing equipment will be carried out mainly for state needs, as there will simply be no money from the end-user for updating their printers.”
Andrei Antonov believes that in the first quarters of fiscal 2020, a decline in production and consumer activity can be expected. Still, by the end of the year, the market should stabilize and return to the previous level: "In conditions of the deficit, growth in the dollar exchange rate, buyers should increasingly pay attention to the most economical solutions in terms of total printing costs and cost of ownership".
“Obviously, coronavirus and the associated pessimistic investor attitudes, as well as a significant pause in the economy of China, a decrease in oil consumption and its cost have an impact on the overall economic situation in Russia,” says Boris Dubov. “All this will affect the market for printing devices in 2020: as practice shows, many consumers shift their focus in such situations from acquiring new devices to extending the availability of their existing fleet of equipment.”
HP's official statement says that most of HP's businesses in the affected region have recovered and are gradually expanding their production facilities.”
Assessing the prospects for 2020, companies are not only talking about global economic turmoil.
“In connection with the fall of the ruble, we predict that companies in Russia will begin to pay more attention to reducing operating expenses, which means we can see an increase in demand for solutions for optimizing office printing,” says Tarik Alhaurani. - In 2020, the trend for EDM will continue, in connection with which the concept of MDS (Managed Document Services) will be developed. There is a tendency to switch to simplified maintenance of printing devices and optimize their work - solutions for remote monitoring of the status of printers and MFPs by third-party administrators, which significantly simplifies the printing process of large companies with a large fleet of devices. No less relevant trend in 2020 is green printing. This trend is becoming more and more active every year in the Russian print market. For this reason, leading manufacturers are developing entire product lines with an emphasis on ecology and economy."
According to Pavel Anokhin, in 2020, 2 trends will continue to develop within the inkjet printing segment: on the one hand, a decrease in the share of traditional cartridge printing. On the other hand, the opposite trend is evident - the growth of the segment of devices with CISS. The average purchase price increases as printers and MFPs with continuous ink supply technologies are significantly more expensive than similar cartridge devices.
Konica Minolta Business Solutions Russia plans to strengthen its position in the CRD market, including by creating advantages through software solutions, as well as entering new markets related to business processes - for example, RPA4. “Of course, like all vendors, we expect some decline in business activity in 2020,” says Arthur Sinitsin. “But we are not stopping the activity but only slowing it down somewhat since part of our goods are produced in China.”
Andrei Letunovsky believes that in 2020 "there will be an increase in equipment prices, manufacturers will try to profit from the sale of equipment immediately, not expecting to sell a lot of consumables. Also, further M&A transactions are not ruled out, as well as the possible withdrawal of 1-2 vendors and (possibly) IT distributors from the Russian market. Besides, it is interesting to know whether any of the vendors will localize production in Russia."
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