Notebooks
are in vogue. And no, we are not talking about the digital computing device
here.
Did someone
say notebooks, the ones that are crafted from paper, would die a slow, but sure
death? That their fate would be similar to audio tapes, camera-film rolls and
other such categories that had suffered a similar fate in the past? As even
schools began to use digital devices to educate children, many had said that it
was only a matter of time that the sword of Damocles hanging over the category
fell.
In India,
well before tablets and smartphones began to rule, the general expectation was
that the stationery market, and specifically notebooks, did not offer much to
write home about. Traditionally the stationery market in the country was an
unorganised one. From small retailers to independent sellers, many depended on
Chinese imports. But if recent market reports are to be believed, paper has
found a new status in the digital age and market experts believe stationery is
a segment of promise. What has changed and how did notebooks make themselves
relevant in the digital age?
Writing on
the wall
The growth
of notebooks over the last few years, from a humble Rs. 6
for a book to a premium product that can cost as much as
Rs. 1,000, demonstrates that along with challenges there are also
several opportunities.
In the
notebook category, brands such as Navneet, Bluebird and ITC have had a
significant say in how the market has moved over the last decade. Last year
Japanese stationery major Shachihata Inc announced a large investment in India.
A few years
before that, the Kokuyo Group entered this market after purchasing majority
shares in Camlin, a well known stationery manufacturer in India.
ITC’s
Classmate notebooks, which target the educational segment, have had several
sales highs over the years. The notebooks business of the tobacco-to-hotels
conglomerate is now ten years old. One of ITC’s advantages was that its
notebooks business could rely on its existing value chains of production – the
company has a large paper business division-- to “create a new engine for
growth”.
Chand Das,
Chief Executive, Education and Stationery Products, ITC says, “The branded
component of the market in India when we kicked off was about 6-7 per cent.
Today it’s about 35 per cent.” ITC claims to have a 20 per cent share of the
organised market.
“Notebooks,
especially of the Classmate kind, are a seasonal category. That back-to-school
period of May and June are good for us. In about six months, we manage about 75
per cent of our total sales across the country, with the rest of the year
catering for top-up demand,” explains ITC’s Chand Das.
Taking notes
online
Even online
players like Flipkart and Amazon have a significant interest in the category.
Flipkart, for instance, claims to stock 10,000 SKUs of notebooks.
An Amazon
India spokesperson says that notebooks and diaries account for substantial
sales in the stationery category. Online purchasing behaviour in notebooks is
more prevalent in premium notebooks like BILT and Paperkraft than in the mass
range of notebooks which account for approximately 50 per cent of the market.
For Flipkart too, diaries and notebooks are “key traffic drivers which contribute
to about 15 per cent of the total stationary segment.” Ankit Nagori, Chief
Business Officer, Flipkart, says, “Fuelled by a growing economy, a burgeoning
middle-class, and higher literacy levels, the notebook market in India is
expanding at a fast rate. With capital being invested in the book and education
industries, this sector is going to be the ground for experimentation and
innovation in the coming years.”
Das of ITC
says, “Our premium products are stocked first with our e-commerce partners.
Those strong partnerships help our overall business in notebooks.”
“Industry
growth is driven by increasing literacy and enhanced scale of initiatives in
the education sector. But there’s also the shift from inexpensive products to
quality products.” Flipkart’s Nagori says, “Among the technology-savvy
generation, a small percentage of our users have shifted to digital mediums
like laptops, smartphones and tablets. Despite this, a majority of customers
prefer a notebook. We have close to 10,000 products under this category. With
customised diaries seeing takers across age groups too, we believe that product
innovation in this category can further add to the ‘collectible’ value of
notebooks.”
ITC too has
over 200 premium products. While the average price of a Classmate is Rs. 30, its premium notebooks cost a lot more.
Write is
might
Even for the
brick-and-mortar bookstores that take the burden of heavy rentals in urban
centres across India, notebooks make serious business sense. Competition among
bookstore brands means the clear demand for notebooks and related stationery
products has to be met.
“Stationery
is the second-best selling category across all our retail stores. It makes up
about 30 per cent of our total revenue. “About 10 per cent of our revenue is
generated from notebooks alone. We sell notebooks from as low as Rs. 6 and it can go up to Rs. 1,000
or more. The organised notebook market in India is about
Rs. 5,000 crore, which is about 20 per cent of the entire stationery
business in our country,” says Darshit Shah, Vice President – Product, Sapna
Book House.
Store 67 is
a premium stationery brand from Sapna Book House. Shah says, “We have seen an
increase of 15-20 per cent year on year in our notebook business. In India from
2009 till 2012 stationery business has grown at over 30 per year every year.
In the
coming months to a couple of years, there’s likely to be added interest from
foreign brands for a share of the notebook and stationery pie. Already, Relay,
a book press and traveller convenience brand, is making inroads in India.
Airport lounges across India may prove to be an added point of traction for
premium notebook brands. Going by the scale of demand and the range of
offerings here, the notebook is nowhere near extinction.
To allay
fears that notebooks are not good for the environment or that they play havoc
with corporate sustainability missions, ITC has spotted an opportunity. It sees
the notebooks business as an opportunity to showcase sustainability across the
chain of production. The company’s R & D reportedly helps it consume fewer
trees and water in its production of Classmate.
A simplistic
interpretation means there may be enough resources for a longer period of time
and therefore notebooks and paper-based businesses will endure for years to come.
Paper has
found a new status in the digital age and stationery is a segment of promise.
Source | Business Line | 10 July 2015
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