By Bappaditya Chatterjee
Digitisation and the widespread adoption of electronic devices have not dented the market for writing instruments. The industry, which registered a sales growth of about 12 percent last year, is expected to grow by double digits in the current year as well, stakeholders said.
In fact, pen manufacturers remain bullish on writing their growth story and are betting on increasing literacy in a developing country like India.
A recent study by Euromonitor International showed writing instruments registered “current retail value growth of 12 per cent in 2016” to reach Rs 4,100 crore ($616 million). Pens, which remain the largest category within the industry, accounted for 67 per cent of retail value sales in 2016.
“In the last few years, the keyboard, keypad, touch screen have become the preferred writing instruments for students and professionals. Are they replacing the traditional pen and pencils? The answer is no. At least in the next 20 years, I do not think there will be any threat from increasing digitisation,” Linc Pen and Plastics MD and CEO Deepak Jalan told IANS.
“In volume terms, the market grew about 6-7 per cent last year and a similar trend is also expected in the current year. In value terms, at least a 10 percent growth in writing instruments is expected in 2017,” he said, adding that the growing literate population will lead to higher consumption of pens and pencils.
In the 2011 census, India’s literacy rate was put at 74.04 percent, up by about 8.66 per cent from the previous census. Compared to the adult literacy rate, the youth literacy rate was about nine per cent higher.
Echoing Jalan was Shreyansh Kocheri, an analyst with the research firm Euromonitor International, who told IANS that electronic devices, such as smartphones, tablets, and portable computers, did not impact sales of writing instruments in 2016.
“There are, however, an increasing number of government programmes that provide public school students with free school materials, including notebooks, pens, and pencils, among other items, which limit overall sales of such products in retail channels,” he said.
Apart from the daily needs, the psychology of attaching greater value to the written material is still driving growth for the industry.
“More and more digitisation is happening, but people are still appreciating the benefits of writing by using pen or pencil on paper. Just as using electronic devices for writing emails, Whatsapp and SMSes, a lot of people are valuing the written words, realising that notes in black and white create a lot more impact,” William Penn’s CEO Nikhil Ranjan told IANS.
There is enough research and it has been proved that people remember hand written words and notes more vividly, he added.
Not only has there been technological advancement in the digitisation space; new technologies in pen industry usher more durability with long-lasting ink and smoother tips.
A writing instrument is no longer limited to a quill and a bottle of ink — it has got roller ball and ballpoint pens, besides the traditional fountain pens.
“These writing instruments make writing easy. These pens are long-lasting. Kudos to technological improvement where the kind of raw material, metals and inks used while manufacturing these pens make it more consumer friendly,” Jalan said.
A recent study also showed that roller ballpens registered the strongest current retail value growth of 17 percent in 2016 with sales touching Rs 700 crore. Growth was driven mainly by pencil-led refills and inkwells and refills, which registered current retail value growth of nine percent and 11 percent, respectively, in 2016.
Ballpoint pens drove sales as this category and accounted for 47 per cent of writing instruments’ retail value sales.
Apart from the domestic market, pen manufacturers remain positive about overseas markets as exports of writing instruments, which stood over Rs 1,000 crore, has been “growing over 10 percent year-on-year”.
“Exports of writing products to highly-developed countries like the US, and European countries, which are far ahead in terms of digitisation, have also been growing,” Jalan said, adding that Indian pens are getting preference over Chinese in terms of both quality and prices.
Out of the total market size for the writing instrument, the organised market comprises about 70 percent while the rest is covered by unorganised players.
“The introduction of Goods and Services Tax would also be a driving force for the industry, particularly for the organised segment, as it would ensure seamless movement of goods and raw materials,” Ranjan added.