MBA Aspirants are expected to know markets of established Brands. This helps them to understand industry for which they are dreaming to join in future. Today, you will read on Writing Instrument Industry in India
The writing instrument industry in India is huge; and it is estimated at about Rs 2,600 crores. Out of this, the organized sector is worth Rs 2,000 crores. Despite an increase in the usage of computers and smart phones, people still continue to use pen and paper.
Experts predict that the writing instrument industry will survive for years because of the technological advancements in this sector. There are technological improvements in the raw materials, ink and metal used in the making of writing instruments, which increase the user friendliness of the products. And this is the reason why consumers still use pens and pencils in this technological era.
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Not only is India a huge producer of writing instruments, but it is also a large exporter of writing instruments. In fact, India exports pens worth Rs 200 crores. The Indian market comprises 15 large-scale, 100 mid-size, and 900 small-scale manufacturing units.
And these units have a total production capacity of over 10 million units on a daily basis. And these units are sold in local markets – in stationery shops, book shops, and supermarkets, and distributed in offices.
Close to 80% of the revenues of the pen industry in India come from pens that are below Rs 15 per piece. There is a wide range for the pricing of pens – a pen can cost as low as below Rs 15 per piece and as high as Rs 100,000.
So, majority of the revenue comes from pens that are below Rs 15 and a small percentage of revenue comes from pens that are priced between Rs 100 and Rs 300. Pens of premium brands form a miniscule segment of the market.
The market for pens below the price of Rs 15 is growing at 7-8% annually whereas the market for pens above Rs 15 is growing at the rate of 8-10% annually.
Around 55% of the consumers of writing instruments are students, followed by executives and office-goers at approximately 20%. In the mass segment, where the price of the writing instrument is below Rs 20, the major market players are Cello, Linc, and Reynolds.
In the high-value segment, where the price is between Rs 20 and Rs 400, the market players are Uni-ball, Pilot and Parker, whereas in the premium segment, where the price is above Rs 400, the major market players are Mt Blanc, Parker, Cross, Lamy and Sheaffer. At present, Linc, the leading brand in writing instruments in India, has close to 15% market share. Linc has a Rs 500-crore market size in the Indian pencil industry.
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The demand for writing instruments will continue to grow in India because India’s working population is expected to grow by 20% by 2020, leading to a higher per capita income, which in turn leads to greater literacy and a growing demand for stationery.
Writing instruments have also made their way into the corporate gifting segment. During corporate events, writing instruments are given as gifts or mementoes. Many people have the misconception that technological advancements will reduce our dependency on pens and pencils.
This is not true. As long as companies continue to make pens and pencils of good quality that are on par with technological advancements, we will witness the growth of this industry in India.