Business is about finding opportunity and taking full advantage of it. Printer cartridge recycling is a fast growing industry, with a tremendous earning potential. There was a time when ink cartridges of your printer could not be refilled but had to be replaced with a new one when they dried up. Thus printer manufacturers used to make money on the cartridges rather than the printers themselves—particularly in the case of inkjets. Naturally, these manufacturers were not inclined to refill used cartridges when this choice came into the picture. Another option in the past was to get your cartridge refilled by a local company that undertook refills but this meant either poor quality printouts or damage to the printer.
Current Scenario:
Today’s times are seeing a degree of transition with companies providing compatible or remanufactured cartridges that not only have the compatibility with the original product but are also available at three-fourth the price of an OEM cartridge. There are over 50,000 odd players in the business of refilling and remanufacturing across the country employing more than five lakh people. Out of it 100 remanufacturers and 500 refillers in the country can be called serious players with quality brands, proper manufacturing facilities and trained manpower. As per estimates, the Indian cartridge market is estimated at around Rs 4000 crore, growing annually at 30 percent.
Talking about the current scenario of refill industry in India, Mr. Rohit Shah, President, JET TEC Info-Consumables (India) Pvt. Ltd., says, “The economy in the country is growing through a tough time. This is a time when companies are looking for cost effective option. Refill industry in India is growing or rather coming of age now. Many customers are opting for refilling as an alternative to expensive New OEM Cartridges. It is a preferred option for customers initially as the difference in cost is huge.”
Adding further he says, “Expenses and overheads have increased overall but increased competition has created great pressure on refiller’s margins. It is forcing them to opt for poor quality raw material or manipulate with the quantity of supply. This has created a dangerous trend of sorts which only leads to self destruction. So, it is a double edged sword of sorts for the industry.”
Echoing his thoughts on the same line, Mr. Atul Tibrewala, MD, Cartridge Junction (India) Pvt. Ltd, say, “India is a price sensitive market. Remanufacturing process have improved to such a level that the remanufactured cartridges have become equal in quality and yield to OEM cartridges.”
Growth Drivers
In India 75 to 80 percent of the market is still covered by OEMs whereas all other players like compatible cartridge manufacturers, remanufacturers, and refillers comprise only 20 to 25 percent of the market. Projections show that the market share of these players is set to rise.
Throwing some light on this, Mr. Dhruv Mahajan, Business Development Director, Discover Imaging Products Ltd., says, “Some of the reasons that have led to the growth of the refilled cartridges market include the high cost of the OEM cartridges combined with the emergence of refillers and remanufacturers who have access to better equipment and raw material. Also, the government is also slowly opening up to this industry. People should be made aware about the fact that by using refill cartridges they are contributing towards conservation of the environment. ”
Adding further to these reasons, Mr. Rohit Shah, says, “Indian consumers are realizing the dual benefit of cost saving as well as environmental benefits of using Recycled Cartridges and therefore, it is becoming more of a preferred option for customers. This is one factor that drives this industry in India. Local availability of International Quality products is also one of major factor that drives the growth as Indian Recyclers are able to offer a better quality product to their customers who are habitual to using high quality cartridge.”
Indeed Price and environmental benefits are the main reason, apart from them, Mrs. Neelam Sharma, Country Manager, ProDot Group, thinks, “Owing to increasing competition in this segment, after sales service/support will be another important determinant in the coming years. Most importantly customer satisfaction should be the motto of the company.”
“Only 35-45% customers use recycled cartridges. This presents a huge opportunity. Since last 12-18 months there has been a slow down; this has forced the customers to cut cost. This can provide a big boost to this segment as remanufactured cartridges provide a much cheaper alternative without compromising on the quality.” Mr. Atul shared his view on the same.
According to Mr. Dayashankar Sharma, Divakar Computronix & Systems, “Price and environmental benefits should be the main reasons why an individual or a company should opt for refilled cartridges. They should realize that by doing they are benefitting their organization and mother Earth also. Yes, earlier there were some quality concerns but that been addressed in a good manner by the industry at large.”
Retail Segment
There was a time when there was a boom in the retail segment for this industry. But owing to factors like sustainability issues, initial heavy investment, over the time the interest has reduced. Talking about the factors that have affected the franchisee model, Mrs. Neelam Sharma, says, “Opening up a franchisee requires initial investment to a score of Rs. 7-8 lacs. Special skill is required for refilling which can be attained with a proper training as well. Opening a franchisee requires you to develop infrastructure as well which automatically increase the investment.”
Giving a synopsis of the future of franchisee model, Mr. Atul Tibrewala, says, “This concept started in 2007, by 2010 there were only 4-5 companies with 100 outlets which catered to the nearby clients only. The margins are under severe pressure and high franchisee fees, manpower costs add to their sustainability issues. Also maintaining consistency in quality with new models coming up with increasing frequency creates extra pressure.”
Road Blocks
Awareness amongst end-users is one of the most important factors that are impacting the growth of this industry. Stressing on this point, Mr. Rohit Shah, says, “Customer education / Recognition by Government / Corporate remain the single biggest challenge for Indian recyclers. Unless it is recognized as an industry by everyone, it cannot reach to its true potential despite of the benefits it offers, be it saving costs, saving environment or generating employments like many other industries.”
Another concern for this is the increase focus on providing quality product and not run after giving lowest price. Elaborating on this factor, Mr. Dhruv Mahajan, says, “A key concern for users who go for refilled cartridges is that inferior grade ink will clog the printer head or even damage it. Remanufacturers should insist on inspection, cleaning, replacing of worn-out parts and then refilling with ink. The remanufacturers should advertise, conduct road shows, take part in conferences thereby generate awareness about the benefits of using refill cartridges amongst the end users.”
Technology upgradation done by the OEM by bringing up a wide variety of printers in the market is another factor that can slow down this segment.Mrs. Neelam, says, “OEM condemn the quality of refilled & remanufactured products as somewhere their business revenues are badly affected by refilling & remanufacturing industry so somehow a misconception prevails in the market about warranty clause although they clearly state the warranty is not void if refilled products are used but when it comes to face the real scenario with consumer for the sake of replacement, consumers face lot of trouble.”
Adding to the above mentioned challenges, Mr. Sharma, says, “People also take this as a status symbol issue. They tend to go for original cartridges thinking that it’s not socially acceptable to use refilled cartridges. Also, in a company the employees always go for original cartridges. They don’t think about cost cutting methods. This attitude again creates a barrier in the growth of the industry. It needs to be changed.”
Overall, there are really two different buying groups. OEM cartridges will continue to find a market amongst businesses in industries such as photography, advertising and graphic design, while businesses for whom quality is not so much of an issue will continue to opt for lower priced compatibles. To sum up, whether you choose to purchase OEM or compatible cartridges will depend largely on:
- The quantity of printing you do
- The level of quality you require
- The importance you place on price
- The importance you place on environmental issues.
