Foreign printing equipment vendors’ official withdrawal from Russia in 2022 has not sent the domestic printer and MFD market tumbling, as one might have expected. Moreover, it even grew slightly in 2023, with the officially departed brands accounting for a significant proportion of sales, which was even more surprising. Yet, the market structure has changed markedly. Why has the printer market remained stable? How is the structure of sales changing, and are we going to see any new vendors soon?
There are still enough printers in Russia
Russia’s economy is “in tatters” – in fact, this narrative was launched by none other than Barack Obama when he was President of the United States. In 2022, when foreign companies – including manufacturers of printing equipment – began to leave Russia, the idea resurfaced although it was phrased differently. However, after struggling with paper shortages for a while, the market straightened out, as printers were still in ample supply.
This point can be substantiated by the following statistics taken from open sources, with just one reservation – figures are available for a ten-month period from January to October 2023, so it makes sense for them to be compared to the same period in 2022. While the sales data in absolute figures may change over two months, it is unlikely that proportions will, because the market has demonstrated a rather high level of stability.
Essentially, over the past ten months, retail buyers (the public sector not included) bought around 1.5 million devices across all categories – laser, inkjet, thermal, LED and even dot matrix printers, which account for less than 1% but are still available on the market. The number of sold and bought devices has grown by around 40% as opposed to 1.2 million devices year-on-year.
Laser printers and MFDs account for two-thirds of the entire sales volume, with over 1 million devices sold as opposed to around 770,000 year-on-year (40% growth). The structure of companies on the market remains the same but their shares have changed. Pantum has increased its market presence from 42% to almost 60%. НР has shown a slight decrease from 26% to 20%. Canon’s share grew from 5% to 7%. Kyocera slightly shrank from 10% to 8%. Brother, whose share was just over 10% in 2022, has reduced its presence to a statistical error.
The inkjet printing market has slightly grown as well in absolute figures, by around 10%, from 320,000 devices in 2022 to 350,000 in 2023. However, considering the general dynamic, its share in the total volume went down from 27% to 22%. In this segment, НР lost its leading position, with its share dropping from 50% to 30% while its constant competitor Canon slightly strengthened its market presence, growing from 25% to 30%. Epson is the main beneficiary among inkjet printer manufacturers, skipping steps from the third place with 20% to the first place with 40%.
Reasonably, one may wonder how the brands that left the Russian market two years ago made it to the ranking. This question will have a two-part answer. Firstly, when Western and Japanese companies started to leave, many distributors replenished their stocks, buying anything available on the international market. As a result, they imported so many inkjet printers that, at the current consumption level, the stocks would suffice for about two years. And secondly, we should not forget about parallel import that is also common in almost any other industry.
Officially, only a few companies still operate in Russia. They are Pantum (China) that does not produce inkjet printers but is strong at laser printing, and companies like Avision (Taiwan) and Katyusha, a new Russian brand. For the last two, their market presence is incomparable to the parallel imports of global giants.
New lease of life for regional retail
Historically, the printing equipment market has been shaped by sales through offline stores and online platforms. The former are predominantly represented by chains like DNS and M.Video-Eldorado, while the latter encompass online marketplaces. However, this year has witnessed notable shifts in the sales landscape. While major chains have maintained their overall market share, there have been changes. Specifically, in the laser segment, direct sales have remained nearly constant, constituting about 54% of the total market, with DNS consolidating its position.
Noteworthy shifts have occurred in the online sales landscape. A prominent trend observed last year was the rapid rise of distributors dealing in parallel imports of equipment from third countries. With easier access to foreign supplies and the ability to tap into larger audiences via online marketplaces, regional retail chains teetering on the brink of survival have found a newfound lease of life. Many of them have seen a tenfold or greater increase in turnover in printing technology. For instance, the retailer All Tools, traditionally specializing in tools, gardening, and construction equipment, unexpectedly ventured into the printer market.
It’s worth noting that alongside established players and traditional distribution giants, there’s been a surge in the emergence of hundreds of small companies. These entities procure products in small batches and sell them via online platforms. However, a primary concern is that consumers may not receive adequate warranty service or seller guarantees. Moreover, the equipment may not be tailored for the Russian market, lacking features like Russified software or compatible electrical plugs.
2024 trends
When considering trends for 2024, several key points emerge. Firstly, there is currently no shortage of devices across most segments. Even in the event of complete border closures, the equipment stocked in retail partners’ warehouses is expected to last until at least the end of 2024. Consequently, significant price increases are unlikely. Recognizing that all equipment eventually becomes obsolete, including traditionally conservative products like printers, sellers are incentivized to clear their inventories swiftly.
Secondly, significant changes are unlikely in the inkjet segment, as each vendor is not officially represented on the Russian market. Consequently, supplies will continue through established channels developed over the past two years. This means that all the major brands will remain available as long as you make sure that a particular device offered by a particular retailer is adapted to the local market and comes with a warranty.
Thirdly, in the laser segment, companies that are officially represented in the country will most likely strengthen their positions. In part, this may be due to the fact that large businesses and government agencies will inevitably be updating their printing equipment sooner or later and will be interested in using official dealerships rather than companies that have left Russia, because this situation puts buyers in a vulnerable position when it comes to service and maintenance.
The important question is how much the prices of printing equipment may change in 2024. The final customer cost actually encompasses four components: the factory gate price in the country of origin, logistics costs, financial transaction costs, and Russian taxes. Let’s consider each of these components separately.
There are no objective factors that would indicate an increase in factory gate prices, in particular in China – and most of the products on sale in Russia come from that country. New models with additional functionality launched by the end of the year may be an exception, but the increase is unlikely to be significant. Most likely, the prices of current products will not change.
Logistics costs have definitely grown over the past two years. Russian carriers are under sanctions; they are under serious pressure, and this affects the rates they charge. Two years ago, a container with 1,000 printers was transported for $9,000; now the cost is $15,000.
There are difficulties with cross-border payments. Transaction fees are rising, and it is becoming more difficult to receive money transfers in China. This situation can add another 1-1.5% to the customer cost.
The tax situation is stable, but market participants have concerns that certain manufacturers may be included in the register of domestic producers. In this case, they may have to pay additional duties, which will lead to further price rises; however, there is no reliable information on this score at the moment. It is clear from the above that printing equipment prices may rise by about 5-7% this year, given that no force majeure occurs in the market.
By Alexander Kukin, General Director, Pantum Representative Office in Russia