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Struggle To Survive |
Struggle To Survive
Stationery industries have its own features and classifications with its different market segments. Files and folders contribute to the major market share of stationery market. With the increasing demand for presentation and sophistication in today's world, the importance of this variety has increased a lot. From the last decade there has been improvement in demand for this product especially in India. And in last five years stationery manufacturers for new varieties of different products have taken the constant efforts with latest machineries in this regard, yet something is missing to have good rapport in the International market. Generally the scenario of Indian market mostly depends upon latest product trend in the market. With modern facilities and techniques there is a wide demand for these products in Indian market. These products are coming with wide acceptance in the industry, to cater the extensive demand from big corporate sector. And these products are used in the progressive companies and enterprises; still there is a gap to compete with International market players, which requires great effort to Indian entrepreneurs.
In the passage of time especially, the scenario of eastern markets have changed tremendously. The countries like China, Malaysia, Singapore, Taiwan, Korea are coming out with modern products and production facilities. Around a decade ago they started to enter Indian market with full swing and it was a major set back for Indian producers. In the domestic frame there are various factors that restricts the full-fledged development of this variety. Now most of the manufacturers are using the popular variety of polypropylene to manufacture their large extent of products. The salient features like lightweight; Eco-friendliness, sturdy and strong makes this variety popular and useful. Besides polypropylene is an economical material that offers a combination of outstanding mechanical, physical, chemical, thermal and electrical properties not found in any other thermoplastic.
As compare to foreign countries the raw material available here is still not matching to the international standards. Especially in comparison with the countries like China, Taiwan, Singapore etc. Traditionally the segment of stationery in India is dominated by the unorganized sector both at regional as well as national level. As differ to other countries the tax structure in India is very high and is divided in various forms. The overall tax ratio goes up to 30% that includes 16% excise duty, 8-15.3% of sales tax and varied nature of octroi, in Mumbai, Maharashtra it is 5.5%. Ideally it should not be more than 4%. According to Mr. Nemish Mehta, director of Mehta Hwa Fuh Plastics," unless and until government rethinks on this tax structure and handles the tax payments properly the desired development of this sector is impossible.” Further he adds "the government should seriously think on bringing VAT in practices to avoid any mall practices in tax payment and structure and it will definitely improve business situations for the organized sector in particular". Small-scale production and low demand along with the moderate development ratio affects the overall survival of the market. And with this speed the expansion of the market is nearly impossible. Now we are coming to the biggest factor that unable the development of this sector and i.e. the policies of the government This industry has been placed under small-scale industry and in reserved category with the investment limit of Rs. 1 crore. Nearly 75% of the industry runners’ falls under the cap of unorganized capacity, which largely affects the remaining 25% of, organized enterprises. Due to this reason there is a lack of coordination in the working of this industry. In particular, this segment the foreign companies hesitate to set foot to India, because according to them Indian market is too small as compare to South East Asian market. As compare to other market this market lacks the identification of brand name that can provide effective boost and popularity to it. Low purchasing capacity and high tax components could be the main reasons behind it. According to Mr. Manoj Lodhaya, CEO of Corporate Stationary, "in today's market the value added items are considered as marketing activity without considering their self-consumption value. So in respect to that we are coming out with more institutional promotions providing more stress on consumer exhibitions." In response regarding the role of foreign participation in India. Further, he adds, "International competitors can't compete on the price factor. According to them the size of Indian market is too small as compare to international market and they are not in favor of selling their products cheaper to attract the domestic customers”. The manufacturers are hesitating to invest large amount due to uncertain market and business scenario. Looking to the overall annual turn over of this section it may be close to around Rs. 1000 crores. The market size is not too small but still the desired development is absent. The market size does have a role to play but the coordination among big players tends to create imbalance in situation.
On the contrary if we look at the last decade, the consumption level of these varieties have increased but not the brand names. Besides, purchasing pattern in India is unplanned causing the undeveloped and uncontrolled activities in this segment. As compare to paper files these PP files and folders are costly, making it more expensive. But still the demand of this particular variety is on its increase that in particular it has become the medium of media packaging. In the consideration of modern technology particularly Internet, the big companies do not find any substantial effect on this segment. But in relation to the industry like writing instrument the government should think of some exemptions in the consideration of investment limits. When we look at this scenario the industry of files and folders perform more supportive role to stationery industry despite such limitations and drawbacks. But still with effective efforts from government and manufacturers will change the whole circumstances of this industry and situation. Planned marketing and advertising efforts and up gradation of market will improve. The situation not only for the files and folders but will have its effect on entire stationery industry. Overall, as increasing of demand for this kind of products in the market, the stationery manufacturers still, will have to take more efforts to develop the product by latest technology and tools, but it requires help from Government bodies to compete with the foreign manufacturers.
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