‘Getting your hands dirty with ink’ gets a whole new twist. Confused? Needn't be! If servicing clients is your forte then cash in on a cost-effective yet recession-proof business of recycling cartridges, as it is set to fuel the industry's growth with a
CALL it fragmented or challenging to drive profits, India's cartridge refilling industry is on a new high like never before. Earlier, the market was dominated by locally-run service providers, who used to refill cartridges through unethical methods that resulted in poor performance of printers. After sensing the printing needs of almost all industries, environmental concerns, price sensitivity issues pertaining to buying new printer cartridges, young franchisors entered the fray to offer environment-friendly yet cost-effective solutions to supply the demand stimulated by the printing industry.
In recent times, the trend of buying printer cartridges takes a backseat, as young guns proved their mettle by offering a innovative technology of recycling, refilling, remanufacturing and recharging the ink and toner cartridges and thereby enhancing the reliability of refilling methods and reducing e-waste.
As the trend of refilling is catching up fast, one need not spend extra bucks on buying a new Original Equipment Manufacturer (OEM) printer cartridge, as new-age franchisors in the cartridge refilling industry have taken an initiative towards upgrading the traditional methods of filling cartridges. However, the scenario of refilling cartridges is not same anymore.
Today, well-organised service providers supply recycled and remanufactured printer cartridges that are as compatible as original products, but are also obtainable at half the cost of an OEM cartridge. As far India is concerned, the OEM market has the huge share than the refilling industry.
As per industry experts, in terms of value OEMs are estimated around 70 per cent of the market share, grey/counterfeit is estimated at 12 to 15 per cent and the rest 15 per cent is a mix of compatibles and refilling both organised and unorganised.
In recession times, when small and big enterprises were looking forward to cut down costs, cartridge refilling came as a blessing in disguise for corporates. It's purely a promising segment, influenced by an incessant demand and propelled by cost-effective solutions. According to statistics available, the cartridge refilling industry is pegged at over Rs 4, 000 crore and is growing at over 30 per cent year-on-year with no saturation point in distant future.
Seeing the increase in the counterfeit cartridges and use of poor quality ink by locally-run refilling service providers, organised players dived into the fragmented industry to cover the loopholes by endorsing a green concept of re-use and recycle.
Considering the demand generated by India's printing industry, Australia's Cartridge World entered the Indian market by taking the first mover advantage by clinching a master franchise deal with AFL Pvt Ltd, pioneer in cargo and courier industry. Presently, Cartridge World uses innovative technology to help a customer save money, time and environment without compromising on quality.
Naveen Rakhecha, CEO, Cartridge World-South Asia, asserts: “Globally, 62 per cent printing is attributed to the Internet and India tips to be one of the largest Internet-user country in the world, and is bound to see this industry leapfrog.”
While talking about the industry's potential, Cartridge Junction's CMD Atul Tibrewala says: “The industry is evolving and growing from strength to strength. It is saving huge money of customers; it's eco-friendly and provides huge employment opportunity.” Experts feel that the cartridge refilling industry needs to evolve in more organised way by being innovative and customer-centric in terms of delivering a quality service.
Food for franchising
In India the Cartridge refilling segment has a reason to smile, as it is slowly and steadily catching eyeballs of organised players for investment. The model of franchising makes it easy to emulate the brand's success in the untapped regions.
The cartridge refilling and remanufacturing industry is flooded with top guns such as Australia's Cartridge World, Cartridge Cafe, Re-feel, Cartridge Station, Cartridge Junction, Print Studio and so on. With the ingress of plenty of players in the refilling bandwagon, the industry is catching up rapidly in India, as every industry's printing needs are boundless.
Most companies prefer to outsource services from business service providers to cut costs. Through a network of franchisees spread across the nook and cranny of the country, refilling needs of corporate clients are served at a much faster rate.
Cartridge World runs 100 franchise stores pan-India. While globally, the company has 2,000 stores across 52 countries. Besides, AFL via the franchise route intends to set-up a network of 250 Cartridge World stores in the next few years and aims to garner a 10 per cent market share. On the other hand, Cartridge Junction operates through 100 retail and channel partners. When asked about spreading wings in new locations, Tibrewala said: “There are over 600 cities and towns growing rapidly. Technically any area where new developments are happening is a growth area for us.” Currently, Re-feel is operating over 115 stores in over 80 cities. Commenting on spreading the brand's footprint, Samit Lakhotia, Co-founder Director, Strategy and Business Development, Re-feel, confirms: “We are planning to open 150 stores by next year. Presently, we are present in tier-II cities and are targeting tier-III cities as well.”
According to industry statistics, Cartridge refilling industry generates mainly a business from retail, SMEs and enterprise/corporate segments. Cartridge World has global vendor relationships for effective buying of raw materials. The company also has market development team with dedicated business development managers, who tie-up with corporate clients and the business generated is passed on to franchisees.
Talking about the business generated from business clients, Lakhotia asserts: “Almost 50 per cent of the business comes from the corporate clients, which is normally routed through our franchisees present all over the country.” As it's a complex industry, it requires technical expertise on an ongoing basis. For this, Re-feel offers complete business model training and helps its franchisees from the scratch in setting up their business model.
In the service-oriented business, franchisors follow a specific criterion for partnering with franchisees. Franchisors prefer to do business with like-minded franchisees who are committed towards taking the mission forward by providing best sales and service package and informing about the benefits of recycling. Highlighting their criteria for franchisees, Tibrewala, asserts: “More than basic funding and infrastructure, a franchisee should have a strong selling expertise and potential customer network in this industry.” Cartridge Junction expects to partner with franchisees, who are at least graduate with expertise in IT and IT products sales and services.
Training & support
In a servicing business, offering a complete technical training and support to franchisees is considered relevant for transferring the business concept. They must be equipped with right training so that franchisees are able to offer well-defined services to corporate clients. Rackhecha informs: “All our franchise owners receive an initial business orientation and technical training for two weeks at our accredited state-of-the-art Centre of Learning. In fact, the technical staff of our franchisees goes through an intensive two-week technical training course while the sales and the counter staff goes through a six-day intensive training, covering basic technology, sales and retail management. We ensure the entire staff of Cartridge World is formally trained and certified by our training department. We also organise sessions by experts and professionals from various industries, covering topics from brand building to importance of HR in business.”
Satiating the customer's needs by delivering quality service in a service-based business is a common challenge that every franchisor faces.
Addressing a large price sensitive market, changing the consumer's perception about refilled and recycled cartridges and delivering a quality service are the major challenges. On tackling the risks, Tibrewala, clarifies: “To win customer's confidence, we provide a comprehensive-managed print solution pan-India that covers investment in printers, comprehensive service and repairs, quality supplies all at a single per page cost. This gives comfort to customers, as we take full responsibility for the quality, yield of our cartridges and also take up the responsibility for any issues that may arise from the use of our remaining cartridges in printers.”
The way forward
As the salability of multi-functional printers is on the rise and printing needs of almost every industry are never-ending and increasing internet usage remains elevated, the demand of printer cartridges will continue to stimulate. By giving a green signal to the cartridge industry's ever-increasing reach across every sector, Rakhecha notifies: “With the pressure on cost-cutting and growing awareness about scientific process of printer cartridge recharging technology, the market for refilling will continue to grow.” While, on a positive note Lakhotia affirms: “Cartridge refilling industry's success rate is around 50 per cent.”
So, the cartridge refilling industry is undeniably turning profitable and leaving no stone unturned when it comes to feeding the technology-driven industry with value-added and cost-effective services.