International schools and other educational institutions — where the well-heeled go to study — are driving the growth of premium stationery. Going premium is how Indian companies such as ITC can fight foreign companies for which the Indian stationery business is the new playing field, says Mr Chand Das, Chief Executive, ITC – Education & Stationery Products.
Japanese company Kokuyo took over Camlin a year ago. Mitsubishi Pencil recently took a 13.5 per cent stake in Linc Pens which has been distributing its Uniball pen for years. French group BIC had picked up 40 per cent stake in Cello Pens a few years ago. (The case went into arbitration as Cello wanted to reverse the agreement). Staedtler, Faber Castell, Maped, Crayola are present in India either through joint ventures, acquisitions or distribution arrangements. Luxury brands such as Mont Blanc are also present.
Stationery is as much an object of desire as any other consumer goods, says Mr Das. There are an estimated 250 million students studying in 1.5 million schools in India, he adds.
ITC has been adding higher priced products to its brand of Classmate notebooks to meet “new-age consumer requirements”. Called Stripes, they are at a premium of 20-25 per cent to the plain vanilla range. This ‘premiumisation’ is part of a larger move at ITC where it is now the mantra across all its businesses, including foods, personal care and apparel, he adds.
Design oriented
The premium thrust extends to pens, pencils, geometry boxes and art stationery. Even its Paperkraft brand of notebooks, for executives, is being enhanced with a ‘Signature’ series which is heavy on design.
The stationery market is estimated at Rs 10,000 crore in consumer spend, of which manufacturers retain about 60 per cent, says Mr Das. Only 30 per cent of the notebooks business is branded. ITC claims the largest share, of 15 per cent.
The other big players are Navneet Publications and Ballarpur Industries. Eighty per cent of the pencils business is branded. Hindustan Pencils, with its Nataraj and Apsara brands accounts for 60-65 per cent of the market. Seventy per cent of the pens market is branded.
ITC expects its business to grow at a CAGR of 25 per cent over the next five years, as against the industry, which it sees growing at 10 per cent.