Is there a market for DMPs in India?

While there’s a general perception that dot matrix printers are on the way out, recent trends and analyst reports point to a revival in the segment. With verticals like banks and retail upping the demand for DMPs, vendors like TVSe, WeP and Epson are aggressively pushing their products. But is this just a passing shower? SRIKANTH R P tries to find out

S NARENDRAN points out that the cost of printing with a dot matrix printer can work out to as low as 2 paise per page

FOR a segment which many analysts believed was on its last leg, 2003 was a happening year. According to research firm IDC, in 2003 around 3.77 lakh dot matrix printers (DMPs) valued at Rs 431.5 crore were sold, registering a unit growth of 23.6 percent and value growth of 28.6 percent. Does this indicate a resurgence of the segment? Though such growth may or may not continue at the same rates, vendors like TVSe, Epson and WeP are pushing hard for sales with a lot of customisation.

Says Sanjit Sinha, head, Hardware & Channel Research, IDC India, “The market for DMPs has bounced back for two reasons. First, there has been an increased thrust in the DMP market by vendors such as TVSe, WeP and Epson. Second, sectors like banking, insurance and government continue to be big drivers for the DMP market in India.” While many analysts believe that the market for DMPs has shrunk, the few vendors who are eyeing this space are still bullish on the opportunity. While segments like inkjet printers have grown faster than the DMP market, there is still huge demand coming from sectors like banking, retail and government.

Says Samba Moorthy, deputy general manager, Business Products, Epson India, “While DMPs have been a stable market, RBI directives (to banks) on Total Branch Automation (TBA) have been catalysts that have resulted in impressive growth rates. Other big growth areas have been sectors like government and retail.”

Vendors like TVSe believe that since the DMP segment is not on the radar screen of MNCs, this is a big opportunity for domestic vendors. No MNC player is investing substantially in R&D for DMPs—some of them are looking at cutting costs, while others are looking at exiting the market altogether. A vendor like TVSe therefore stands to benefit. If a global

DMP player is looking to cut costs, it can utilise TVSe’s manufacturing capabilities to do so. On the other hand, if a player decides to exit the market, it may lead to a bigger opportunity for a vendor like TVSe. For example, TVSe has innovated by developing a printer that is specifically suited to the Indian market; this has seen it move into a leadership position. The result of feedback from over 600 customers has helped it design the Proton, which the company says is the world’s fastest bill printer. TVSe has introduced another innovation to the DMP market by adding an Inkbank that extends the life of the cartridge and improves print quality. The company says that with the help of the Inkbank, a customer can save close to 70 percent on printing costs. By attacking two major concerns of customers—print cost and consumables cost—TVSe has been able to gain market share.

While analysts believe that the market is stagnant and may even decline, vendors argue that the low cost of printing in transaction-based environments makes the DMP a value buy over other types of printers. Says S Narendran, general manager, Marketing, TVSe, “The rugged nature of DMPs suits harsh Indian environments. Additionally, on a DMP, the cost of printing per page works out as low as 2 paise per page. No other printer can offer this kind of value for transaction-based environments.”

Apart from innovations by TVSe, notable innovations from WeP Peripherals have pushed customers to choose DMPs. Says Ramdinsanga Saiawi, product manager, DMP, WeP Peripherals, “We have innovated by delivering India’s first Air Ticket Printer which saves the Indian tourism industry (and agent) the enormous cost of importing expensive printers costing over Rs 1.5 lakh. Our product is available at less than one-fifth the cost. Some of our printers work on both AC and DC power sources, thus making them mobile. These printers are today used in mobile vans, which reach the common man in upcountry towns, and provide printing solutions where regular AC power would not be available.” Other innovations include reminders to users to get their printers serviced at regular intervals, print-head monitoring to know exact print-head life, and local language printing in draft, which is up to five times faster than printing a local language in graphics.

Different

Vendors believe that the DMP market is an entity on its own, and cannot ever hope to eat into the marketshare of other types of printers since the segments are totally different. Even the selling approach is different as DMPs clearly have to fulfil a transaction-based need. Laser printers and inkjet printers cannot hope to compete with DMPs in a batch printing or continuous printing environment.

Says Saiawi of WeP, “The marketing approach for DMPs, unlike inkjets and lasers, is multifaceted. Customers for DMPs are from multiple verticals like the banking, financial services and insurance (BFSI) sector, travel industry, retail, etc. They also range from the humble kirana shop owner to the small office, from SMEs to the government. Applications vary from simple bill printing in a shop to complex multiple stationery printing in a bank. This diversity of customer segments and applications means that the marketing approach needs to cover the entire range from retail presence to end-user interactions.” Moreover, unlike vendors of laser and inkjet printers, DMP vendors cannot hope to earn a major portion of their revenues from the consumables business.

Future

According to SAMBA MOORTHY, the Reserve Bank of India's directive to banks on total branch automation has stimulated DMP growth

While last year was spectacular for the DMP market, analysts believe that it is set to decline. Sinha of IDC cautions that after maintaining volumes for another couple of years, the DMP market is likely to see negative growth. “The main reasons for such a phenomenon are that while convergence in laser and inkjet printers have again put them on the growth path, DMP lacks this ability. The second point is that DMPs would not be able to provide for the next wave coming in the printing space, which is colour printing.”

But while the market is set to decline, there is still a big potential market to be addressed that is not on the radar screens of many companies. Says Narendran of TVSe, “The global market for DMPs is more than ten times our company’s size. For an MNC, growth in the DMP segment may be stagnant, but it is a big market for us.” Adds Saiawi, “The cost consciousness of the Indian market, the inclination to retain records and copies, harsh environmental conditions, and unsophisticated handling and changing attitudes towards automating printing will continue to fuel the market and ensure the longevity of DMPs in India.”

While the growth rates for DMPs may not be on the higher side, the fact that few vendors are concentrating on this segment, coupled with the low cost of printing, makes the market for DMPs an interesting one to watch.

srikanth@expresscomputeronline.com