Retail Jul, 24 2014

Right returns in office supplies biz

The office skyscrapers that appear mesmerising from a mere glance form an equally profitable investment. The diverse sectors within the office supplies industry offer booming opportunities for the franchisors as well as the franchisees. Read on to explor

By Rashi Mathur, TFW Bureau
Feature Writer
Right returns in office supplies biz

According to a new study by Cushman & Wakefield, the total absorption of office properties in India during the first half of 2014 was 13.4 million square feet. With the increasing expanse the demand for basic office utilities like stationery, furniture, hardware and software requirements also increases. The growing office space is a boon for office supplies industry.

Major Sectors and opportunities

For any office, good furniture and seating is mandatory. According to India Furniture Market Forecast and Opportunities -2019, the country’s furniture market is projected to grow at a CAGR of around 26 per cent during 2014-19 and office segment is the second leading contributor in this market.

Secondly, an office cannot function in the absence of stationery. Explaining about the profitability of this business for the franchisor as well as the franchisee, Akhil Goel, Director- Business Development, Stationery Bazaar says: “Retail business in office supplies and kids stationery has a decent profit margin considering the fact that it is a consumable item and there always prevail demands from regular customers.”

With IT boom, every office is well equipped with laptops and printers too. Once supplied with these essentials, they demand repairs and refilling. Throwing light on the cartridge refilling industry, Alkesh Aggarwal, CEO, Re-Feel says: “The worth of  cartridge refilling industry is more than Rs. 2500 crore every year and has seen a steady growth of 20 per cent in India. Printing is an operation that will never cease in spite of all the talks going about paperless work. But what can really minimize environmental degradation is using refilled cartridges. With us, refilled cartridges also give the same quality of output as original ones but at 50 to 70 per cent low price. With the increasing awareness among the consumer market, we think that this industry will keep growing.”

According to Cartridge World, the market size for printer cartridges in India is pegged at over Rs. 3000 crore and is growing at over 40 per cent every year. Cartridge World aims at filling up the vacuum between high priced OEM cartridges and local re-fillers.

In India, there lies a great demand for laptop repairs industry. “Owing to its association with technology, this industry is ever evolving. Off late the concept of bigger companies looking for centralised solution for exercising better control over consumption and thus expenditure is becoming a trend. This will definitely benefit the players like us with wide presence and network,” informs Aggarwal, who is also the CEO of Clublaptop.

Products and Services

Office supply industry has various products and services to offer. Re-feel informs that it primarily provides refilling for inkjet and laser cartridges. They also offer re-manufactured cartridges, OEM cartridges, photo papers and office stamps. Elaborating further about the USP, Aggarwal says: “Technically advanced, environmentally safe and economically viable has been our core USP since the beginning. We strive to make Re-feel more customer-centric, encourage economic use of resources and provide good technology. All our stores guarantee a saving of up to 75 per cent on printing costs without sacrificing on the quality of output. We have developed the technicalities to facilitate high quality yield that is comparable to original cartridge output. Our product aims to reduce the cost to the user while being environmentally safe. It is incredible when benefitting people and nature can help you gain you profits!”

Stationery Bazaar highlights its USP: “We are one stop shop for all types of office supplies, house keeping supplies and customized office stationery. We offer full range of office stationery from paper to pens to office machines.” Stationery Bazaar has adopted the route of e-retailing to carry out its operations. “It is not possible for business to be present everywhere all the time. Via e-retailing we are trying to reach all our potential customers giving them an option to order anytime with ease,” says, Goel.

Franchise Route

Goel of Stationery Bazaar says, “We have chosen franchise model to expand our area of operations, availability and faster response as well as delivery times.” Aggarwal of Re-feel says: “Lack of funds and manpower to grow the business where demand and supply gap was clearly visible, triggered us to take the franchise route. The demand could not be met by few local shops. Back in 2007, there was no other store that was specifically known to provide cartridge refilling service. The franchise module was the best way to spread our brand across the nation. Today we have more than 120 stores.” Adding about the adoption of franchise model by Clublaptop he adds: “Right from the inception of this company, we have taken franchise route for expansion. Being service at the core of this industry we visualised the need of an entrepreneur at every location and that is where the franchising came in. Today we have over 100 stores spread across more than cities.”

Training and Support

Stationery Bazaar has a team dedicated to franchise business. They step in right from the query of customer, to initial discussions, setting up store and training staff. They also help franchise stores to run day to operations, marketing campaigns, and expand business.

Cartridge World conducts a comprehensive training for  five  days before the launch of the store, for the business owner in the Indian head office of Cartridge World. A team of industry experts takes the business partner through all the aspects of the business including sales, marketing, operations, employee management, systems & business management. A technical training of 15 days is conducted for the technicians before the store goes live.

Corporate tie ups

Corporate profit has lead to a modest growth of this industry. The office supplies sector these days has corporate tie ups with companies.  As told by Stationery Bazaar, “We have corporate tie ups with banks, other financial institutions, manufacturers and service industries. Our USP is pan-India India delivery to office location across states, thus facilitating the ease of doing business with one vendor only for multi offices.”

Expansion

Over last five years, Re-feel has grown its business to 120 stores spread across tier I and few tier II cities of India. “With growth of the business and IT sector in tier II and tier III cities, we target majorly to grow in these areas over next few years. We see a huge potential both for us and our franchise to operate in smaller cities and make decent profits while delivering values for customers.

Stationery Bazaar currently has two retail outlets in Delhi, NCR. Both are company owned. “We are in final stages of opening 3 new franchise stores. Currently our focus is on expanding our warehouse location in and around major business hubs of India. We also plan to expand our franchise stores to a total of 10 stores by end of 2014,” says Goel.

Future Prospects

Every work place needs to be stocked with the supply of stationery, laptops and other related hardware and software requirements. The laptop service industry has immense growth potential over next five years. Similarly, an office cannot do without stationery items. Thus this business being recession proof with high profitability and low cost of operation has a bright future and opens up a huge scope for aspiring franchisees.

Franchise Facts

Brands

Area

Investment

Breakeven

RoI

Re-feel

300-400 sq ft

A cities: Rs 6-7 lakh

B&C cities: 
Rs 3-5 lakh

Operational : 3-4 months
Project : 12-18 months

A city: 146%

B&C cities: 135%

Clublaptop

Min 200 sq ft

Tier I:  Rs 5-6 lakh
Tier II: Rs 4-5 lakh
Tier III: Rs 3-4 lakh
 IT: Rs 2-3 lakh

Operational : 3-4 months
Project : 12-18 months

A city: 143%

B&C cities: 80%

 IT: 399%

Stationery Bazaar

Retail outlet :
100 sq ft

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Related: How to shine in the furnishing industry

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