How stationery brands are changing to counter COVID disruptions
According to a report by Technavio, a leading global technology research and advisory company, the global school stationery supplies market is poised to grow by $15.12 billion during 2020-2024, progressing at a CAGR of almost 3% during the forecast period. The growth is encouraging given that schools and educational institutions remain closed or have opened partially due to COVID-19.
Normally the demand for stationery products begins as schools reopen in May-June after summer vacations. Most of the school supplies are acquired either from the schools themselves or from neighbourhood stationery shops. However, with the transition to education from home as educational institutions closed doors in the pandemic times, there has been a change in demand for stationery products.
Moreover, offices too went into the Work From Home mode and many are still continuing with it. Usually well-stocked stationery shops dot areas around schools and office complexes. But due to COVID-19 disruptions, the shops were shut and the lockdown resulted in disruptions in the supply chain. Though the country is now on the mend, it will take a while for businesses to go back to the pre-COVID-19 levels.
The COVID impact
The stationery industry does its major business during the three seasons – the beginning of the new financial year (March-April), opening of new academic year (June-July) and during the festival period. This year, the pandemic has disrupted the entire school curriculum as schools were shut and transitioned to online education. With most offices working from home, the regular supply of various stationery products to commercial establishments also did not happen the usual way.
The shift to online teaching has also reduced the need for stationery brands and the same holds true for the offices and commercial establishments. The increased digitisation and rapid adoption of e-learning, e-books and smart learning classes has reduced the usage of stationery products, which is expected to affect the growth of the stationery market.
Brands discover alternate channels
During these challenging times, e-commerce has become the new channel to meet customer demands. Brads have been tying up with e-commerce players like Amazon and Big Basket to satisfy the end customer. Inchpaper, an e-commerce start-up in the stationery items space, launched its operation of delivering stationery items at the doorsteps in over 50 cities and towns across India during the pandemic. The company aims to provide a full range of stationery items starting from erasers to various teaching-learning materials for school and college students, along with catering to the needs of working professionals and offices. Currently, the firm is delivering their products in over 50 Tier 1 and 2 cities and towns. While the stationery outlets have now reopened, however the demand seems to be lukewarm. With still no signs of schools and offices resuming pre-COVID-19 level operations, stationery buying will continue to happen online for the near future.
The increase in literacy and emphasis on education by the government and a growing young population has fuelled the growth of the Indian stationery market in the last few years. The pandemic has shifted gears for many stationery companies and they are desperate to bring in some innovation and look at alternate channels to generate demand. Things will return to normalcy only when schools and offices start functioning normally, until then all the stationery brands will continue to face some tough times to stimulate demand and increase their revenues.
Commenting on the overall outlook of the industry, Deepak Jalan, Managing Director, Linc Pen and Plastics Ltd, said, “The consumption of school stationery products has less than halved in view of the closure of the educational institutions and at the same time office stationery consumption also declined substantially due to the large number of people WFH. Our e-commerce sales used to be less than 1 per cent of our total domestic sales before COVID-19 struck, which has now gone up to about 4-5% of our total domestic sales.”
He further said, “Going forward, since the off-take from the regular stationery shops is subdued for the reasons explained earlier, we have taken a decision to take our retail footprint to the general stores ad kirana shops, which are huge in numbers. We hope that we will be able to offset some of our loss of sales through this strategy. Driven by a sense of responsibility towards society, the brand set forth to create products that would contribute to the safety of people, which is the need of the hour. Recently, we launched the Pentonic COVID-19 Killer (a self-sanitizing, finger-free touch device) and LincPlus, the herbal hand sanitizer.”
Agreeing that the industry is going through a tough time, Shobhit Singh, Director of Stone Sapphire (makers of Skoodle Brand), said, “Our sales are gradually shifting on the hybrid and online channels are slowly settling in all industries. People now are demanding products in a different ecosystem of an online platform. The touch and feel of the product are shifting to the images zooming and product usage/ unpacking videos before buying. Customers are being extremely cautious about the certification, safety, and quality compliance. While e-commerce has been helpful, but one needs to understand the channels better to get the best returns. It has its own set of pit stops and variable costs, which a company needs to account for by training people, planning logistics and ensuring that cost is kept to the minimum to receive an acceptable margin.”
He further said, “For the future, we have invested more in systems to mitigate the probable trust issues/ product queries of customers by installing a comprehensive FAQs list, customer care resolution system, being more responsive on social media handles, reaching out to real customers for actual reviews, etc. The coming year would be tough on liquidity for every manufacturer, but one must invest more on the quality, packaging, R&D and invest in upgrading and upskilling yourself.”