Pen, Paper and it’s possibilities.
By Aditi Chincholi
The Stationery and Hobby Industry is booming paradoxically at a time when there is substantial pressure for everyone to go paperless, and be ecologically conscious.
According to Statista, in India alone, revenue is estimated to reach ₹112,388m by 2020 end, with an average revenue per user amounting to ₹891.36. Revenue is expected to show an annual growth rate of 12.8%, resulting in a projected market volume of ₹182,156m by 2024. There are an estimated 126.1m users spread across different income groups. User penetration will be 9.1% in 2020 and is expected to hit 21.2% by 2024, with a current YoY of +32.4%.
The affordability of these products is crucial to the massive sales that the segment boasts of. The industry has adapted to the income constraints of the lower-income groups by providing everything either in a small affordable set or selling products like pencils and erasers individually as well. The relative ease with which these groups can access such products is fundamental to the consumer experience; it allows the consumer the opportunity to try out the good, before committing to buy, regardless of whether it is an individual sheet of paper or even a pen. A feature distinct to the industry is how the product itself is bought since a significant number of the purchases continue to be made at the physical stores where the consumer can interact with the product and has the opportunity to observe other consumers.
The education sector is the prime consumer; paper stationery, specifically exercise notebooks and copier paper being the primary sources of revenue. Office stationery follows a close second after education in this context. Government-aided campaigns like the “Sarv Shiksha Abhiyan” and increasing in the enrollment of the students across the country indicate a massive potential for the industry to grow in the upcoming years.
Another noteworthy aspect contributing to the boom is its relative inelasticity, a characteristic that is changing due to the enormous strides in technology.
So, how does the industry stand, in today’s context?
A significant chunk of the total sales is made in the retail stores belonging to the unorganized sector. However, more and more stores from the organized sector are popping up. The local market players strategically open stores in areas where they are confident they can get significant footfall. Further, this means that they are much more likely to have a wide variety of products specifically catering to their principal consumers and will be able to offer substitutes in the absence of a particular product.
Over the years, many brands have started investing more and more into this sector; a theme prevalent particularly among bookstore chains across the country.
Crossword Bookstores, for instance, has considerably increased their holding of stationery products and have partnered to create exclusive products as well.
Archies, for example, reported a 7.9% growth in 2015, with radical growth in the mass stationery and perfume segments, in part due to its entry in the e-commerce segment.
International brands are increasingly investing in the Indian retail sector and certain brands which have an established loyal consumer base such as MUJI, have opened in Tier 1 and Tier 2 cities, with plans to expand further.
In the online segment, giants like Amazon and Flipkart, have been extremely successful in selling premium stationery, writing instruments and office stationery.
While the ongoing COVID-19 pandemic is sure to increase the online sales this year, one is yet to observe the changes due to the pandemic in this sector.
For an increasing number of people stationery today goes beyond functionality, they derive joy from its aesthetics and its uniqueness. People describe themselves as stationery enthusiasts, akin to how a “foodie” may express themselves; this has fueled the growth of the online store and pop-ups on platforms such as Instagram, and Etsy. The rise of specific trends such as “Journaling”, has resulted in an immediate spike in demand for these online store owners.
India has witnessed a massive shift in the way, not only in the way these products are consumed but how one interacts with them as well.
Initially, the products were restricted to the very basics required for office and school. The import of goods from other Asian countries, however, changed the system. With a greater demand for a wider variety of products and an increasing number of middle-income families, the industry has taken a creative leap. The customers now look for value for money, allowing the industry to innovate.
The influx of brands has forced the domestic counterparts to reflect on the way they innovate their products. They happen to, increasingly rely on the advances made by their Japanese and South Korean competitors. The market is witnessing a change in the frequency of such innovations and the affordability of such products. Thus, newer brands continue to thrive on product innovations; it helps them establish their market and continue to grow consistently. They are also exploring the niches in a way that hasn’t been done before, like specific stationery lines for left-handed consumers, the disabled, or even the elderly.
But the question about innovation persists. Are they innovating fast enough?
According to an IBM report called “2020, consumers driving change”, 6 in 10 consumers would change their consumption patterns, to decrease the negative impact on the environment. Moreover, over 7 in 10 would pay a premium for brands that support recycling and practice sustainability.
Over the last year, we have seen a change in our attitudes in the way we project our ecological anxiety, whether it is the Aarey protests or the Fridays for future movement.
Moreover, growing pressure on the industry to contribute significantly towards the resources they are profiting off of has led to the adoption of greener practices, matching each sale with tree plantations, among other things.
Giants like Kokuyo Camlin, Hindustan Pencils (Parent of Natraj and Apsara) or even Classmate, are focusing on putting their environmental contributions under a spotlight. But the same isn’t being observed in their product lines.
It is no secret that with the technological advances, the world essentially hopes to go paperless; a move that could kill the industry.
Over the last two decades, even though the world is transitioning to a paperless system, desk essentials remain, and so do the school basics. Fundamentals like notebooks, paper, pens and calculators are still used, just as they were a few decades ago, and will continue until technology finds a convenient alternative.
Thus, opening up the potential for the industry to cater to the environmentally conscious for the time being, or even try to come with better alternatives for their products to have an advantage.