POP and POS segment facing major growth challenges

Growing commoditization

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POP point of purchase
Saurin Shah of Viraj Prints. Photo IPP

The demand for printed material used to support in-store brand promotion, more commonly known as point of purchase (POP) and point of sales (POS) solutions, in India, especially in bigger cities, is facing significant slow-down due to the growing popularity of online retail stores and shrinking floor space dedicated to such solutions in physical stores. Retail stores, both stand-alone and in malls, are the biggest consumers of POP and POS solutions.

“Due to growing acceptance of online shopping, a lot of brands have cut down their physical store promotional budget and hiked digital advertising budget. This has impacted the demand for POP and POS solutions in recent years. Another reason that has resulted in slow-down of demand is the fact that retail stores have been cutting down the floor space dedicated to various in-store promotional items in favour of stocking more products. This is due to the sharp rise in the number of consumer brands being produced in India,” says Saurin Shah of Mumbai-based Viraj Prints.

Viraj Prints has been a leading print house in Mumbai specializing in rigid board packaging and POP materials such as floor-standing units, display units and countertops. The company was incorporated in 1982 as a letterpress shop, and soon evolved into an offset printing house. Viraj Prints got involved in the Mumbai entertainment industry and began printing materials for music and film companies such as CD and DVD inlays.

A shrinking industry

According to Shah, in the last few years nothing major in terms of innovation and ideas has happened in the POP and POP segment, and there has been growing commoditization.
“Budgets have been cut; smaller printers have exited the industry while some have diversified into other verticals,” he says, adding that this trend is likely to continue. “Above the Line (ATL) marketing is the future while Below the Line (BTL) marketing is receding into the background. This development will have a significant impact on demand for POP and POS solutions,” Shah adds.

He says that major application of POS and POP solutions will be restricted to usage during initial brand launches and these solutions too will need to be very innovative. “These will be very limited and very niche,” he says.

Viraj Prints’ focus on development of ideas

Having spotted this trend in the POP and POS segment early, Viraj Prints has not been aggressively investing in its hardware department. Its last big investment was five years ago when it installed a Komori Lithrone LS 429 with coater and HUV technology. According to Shah, the company’s focus will be on the creative side of the business than on the production side. Viraj Prints has a division that deals with advertising and design.
“More effort will be put towards the creative side of our business as this is what creates intellectual property. Since we do not see any major growth in the POP and POS segment going forward, we will channelize our energies on content creation. Also, we will not be making any major investment in machinery for another couple of years,” Shah concludes.

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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