COUNTERFEITS: Wreck Consumables Market

Counterfeit consumables have been present in the market for a long time now.

But lately, vendors have started taking action against counterfeiters. It has

been discovered over a period of time that resellers, including registered

suppliers, are mixing counterfeit cartridges along with originals. As a result

they are able to sell the same at ridiculously low prices.

According to a source (who wished to remain anonymous), the prevailing trend

is that the counterfeiting reseller opens the original packing, replaces the

original cartridge with the counterfeit one and packs it again–as it is.

This job is done so efficiently that even a person well-experienced in

selling cartridges cannot spot the difference. The distinction between the two

can only be established after the cartridge is fully opened. The original ones

are then sold either without the packaging or in a fake packaging.

Consumables market today



According to DataQuest, printers have witnessed an overall growth in value

by about 25 percent in 2001-02 and a 35 percent unit growth as compared to the

previous fiscal. Inkjets saw a high growth rate of 43 percent over the previous

fiscal in terms of revenues and a 41 percent unit growth, which resulted in

sales of about 3,19,000 units.

These were sold at a total value of Rs 215 crore, with more than 50 percent

being absorbed by the home and SOHO segment. The growth of consumables like ink

cartridges in revenue terms overtook the inkjet printer revenues by registering

total sales of Rs 250 crore in 2001-02.

How partners can put a check on fake consumables Put stickers on all printers, informing users that spurious ribbons/cartridges will damage the print head, which is the heart of any printer and is an expensive item. Use holograms for promotional schemes. This will drive buyers to pick branded consumables in its original packaging. Educate users through regular mailers, catalogs and brochures against fake products. Do not look for quick returns in short term as this will result in customer dissatisfaction in the longer run. Last but not the least, partners should aggressively participate with original suppliers and boycott fakes.

Though the consumable revenue figures are noteworthy, a major portion of it

comes from sales of counterfeit products. These products are considered to have

high volume sales in the SOHO segment. And it has been observed that first-time

users in this segment are more likely to buy fakes.

Says Dependra Mathur, International Operations Manager, Wipro ePeripherals

Ltd, "Users who are new to computing are more likely to buy fake products,

which also include consu-mables." Despite this, SOHO and corporate segments

are considered to be immensely-potential verticals for consu-mables, largely for

laser and inkjet cartridges.

Consortium to boycott fakes



To control the distribution of fake products in the market, Wipro

ePeripherals has appointed a new channel network called the ‘FMCG partners’.

This new network includes stationary outlets, third party maintenance partners,

consumable dealers and printer channels.

According to Dependra, this new channel has helped the company increase the

availability of original consumables, thus putting a clamp on the percolation of

fake products. Currently, Wipro ePeripherals has its FMCG network spread across

five cities, which includes Delhi, Bangalore, Chennai, Mumbai and Ahmedabad.

HP India is also planning a nationwide industry coalition, under the CII

umbrella. It plans to work with leading vendors of the printer industry in the

country. This will help provide a strong backing to legal actions against

manufacturers and distributors/resellers indulging in counterfeit imaging

supplies. This initiative is likely to include vendors like Epson, Canon,

Lexmark and Spice Net (Olivetti).

The association would be more or less on the lines of a similar association

already in existence in Europe by the name of Imaging Consumables Coalition of

Europe (ICCE). ICCE is a non-profit body consisting of five members–Epson, HP,

Lexmark, Oki and Tally. Headquartered in UK, ICCE was formed to put a check on

counterfeit products that were entering the distribution chain. Counterfeits

were estimated to constitute around five percent of the total European supplies

market, which comes close to $500 million.

The need for a similar association in India was felt with the increasing

number of cases being detected for refilled and counterfeit cartridges sold as

originals. "We fully support and appreciate the initiative being thought of

by HP in this regard. We would also be glad to offer our services to them if

there is any proposal of joint initiatives," says Majid Patanwala, MD,

Alpha Consumables. According to him, if they do not take corrective measures

now, the problem will surely hit them harder in the near future.

What lies beneath? The problem is not that refilled cartridges are

increasingly getting sold. In fact refilling as an activity has been present for

a long time. However, things go wrong when these refills are passed off as

originals. And what is creating disharmony in the market is the fact that it is

slowly and steadily spoiling the market operational price. This has started to

result in customer dissatisfaction and a decline in the the revenues generated

through genuine consumables.

So the bottomline is that to maintain growth and excellent customer

relations, partners should consciously boycott fakes, ensure customer

satisfaction by distributing original products and constantly spread awareness

about the counterfeiting menace.

SUNILA PAUL in Bangalore