Grey-marketing slows printer consumables sales: IDC

Market research firm IDC has claimed that grey-marketing 'significantly' slowed printer consumables sales last year, based on anecdotal evidence from vendors and the channel.

Su-Lin Ng, a peripherals analyst at IDC, said that about 14 million units of consumables were sold in Australia in 2003, four percent more than in 2002.

However, the growth was 'much smaller' than 'the market' had expected – a phenomenon which was likely due to grey-marketing, she said.

'Based on feedback we have received from original vendors, compatible vendors and the channel, we have concluded that grey-marketing is significantly [affecting] them,' she said. 'They know it's happening.'

The total 14 million units included original and compatible brands of ink, laser toner and serial dot matrix ribbon cartridges, which grew five percent to 11 million units last year. Laser toner sales, comprising 2.9 million units of the 14 million total, remained stagnant compared with 2002, Ng said.

'The continued strengthening of the Australian dollar had made purchasing terms from overseas more favourable for grey marketeers [or] parallel importers, affecting unit shipments growth in original printer consumables,' she said.

Ng said that printer vendors had cut consumables prices as a result and would continue to keep prices low in an attempt to control the situation. Prices for ink and laser toner in 2004 were expected to be 18 percent and eight percent lower respectively than last year's prices.

OEM and non-OEM or 'compatible' brands – such as Peach, RTS or Caladad – were expected to keep struggling to maintain market share and offer the lowest prices possible, she said.

Meanwhile, steady sales growth was expected to continue, with multifunction, photo and laser printers increasingly adding to the current install base of more traditional models, Ng said, while increased competition sparked more marketing incentives via the channel to keep things lively.

If the Australian dollar continued to strengthen, the trend to grey-marketing and associated price cuts would likely continue, Ng said. 'In the first quarter of '04, we have already heard of several vendors that have dropped their prices again,' she said.