In an exclusive conversation with BW Businessworld, Vikas Gupta, CEO of the education and stationary products business division, of ITC Ltd enlightened the current scenarios and plans of the Stationery market.
The global stationery market stands at 26.06 billion US dollars in 2023 and is predicted to reach 39.32 billion by 2033, as stated in the Stationery Market Outlook. What is the outlook one can see going forward?Discussing the Indian market specifically, it’s evident that the stationary sector is expansive, driven by a surge in enrollments. Dr Joseph Emmaneual, Director of Academics, CBSE, emphasised that aligning the National Education Policy (NEP) with experiential learning signals a positive shift.
Anticipating the future, we expect three significant developments: First, more students will integrate into the formal school education system. Second, these engaged students will encounter a diverse array of learning opportunities. Lastly, there’s a pressing need for the existing educational setup to adapt to current needs.
These factors collectively contribute to driving domestic consumption within the stationary market, encompassing notebooks, colouring tools, writing instruments, and other learning aids. As we look ahead, the stationary segment is poised for substantial growth in the next two years, supported by these evolving trends in education.
The Indian education sector is projected to reach 225 billion by FY2025. How is ITC, a prominent leader in the stationery sector, targeting the rising demand for high-quality supplies in a vast market?
Our focus spans several categories, including notebooks, writing instruments, a geometry box with a touch of creativity, and different colouring materials.
While our scope is limited to these stationary segments, it’s noteworthy that the broader education industry is experiencing significant growth. We have witnessed commendable growth rates, driven by increasing consumer demands for enhanced product experiences.
Positioning our brand on the Android learning platform, we are dedicated to continuously improving our offerings. For instance, in our notebook category, we have consistently added innovative features, starting with aggregates, followed by the introduction of Origami.
Recently, we’ve incorporated augmented reality to enrich the user experience further. The journey is going forward, as we are trying to add more and more features to our array. And the same thing is happening with writing instruments; we’re trying to add an element of joy.
So typically, when you look at some of the new launches we’ve done in the IT instrument segments, such as Hook, it’s a 10 RS ball pen. You can hook it anywhere, you can hook at the earnings, you can hook it into a shirt sleeve, you can put it onto a bag, so it doesn’t get lost. It’s a nice, cool feature.
Another noteworthy introduction is ‘Spin,’ inspired by the insight that people enjoy fidgeting. This writing instrument allows users to keep it spinning while contemplating, adding an enjoyable element to the writing experience. Our approach is not merely about introducing one or two features in specific categories; rather, we strive to pioneer category-defining features and add some fun elements to the journey to make the journey more enjoyable.
What are your expectations from the interim budget, particularly concerning the retail industry?
I am hopeful for increased allocations in the education sector. The finance minister has consistently demonstrated a commitment to budgetary allocations for nutrition and education.
Notably, initiatives like the midday meal scheme and efforts by certain states, such as Uttar Pradesh and Assam, have effectively advanced learning as a core developmental metric. To enhance these positive outcomes, a higher allocation and a better process are crucial for ensuring them.
According to 6w research, the projected CAGR for the Indian stationery market size is 8.2 per cent from 2023 to 2029. What do you think are the key factors driving this growth in India?
The growth in India’s stationery market can be attributed to significant improvements and changes in our approach to this sector. While echoing the global factors I previously discussed, it’s essential to recognise India’s inclination towards domestic production. This becomes particularly significant in catering to our vast population.
Contrary to global concerns about technology disrupting the stationery market, India’s domestic market continues to be the primary driver. Experiential features, influenced by technology, play a role in this context.
For instance, despite expectations that ed tech would completely replace offline education during the Covid-19 pandemic, traditional schooling has remained central to the delivery of education.
The school continues to play a very central role in the delivery of education and is a social reference point because it’s not only about the certification; it’s not only about the teacher being at the centre of the delivery of learning; it’s also about a place where you learn social etiquette.
Considering the unique dynamics of the Indian education landscape, schools are likely to remain pivotal. The drivers of education growth may differ, with an emphasis on increased enrollment rather than a substantial rise in per capita consumption.
The developed market will probably not have that kind of growth for enrollment but will continue to drive external features, and therefore, the volume growth may not be that much, but the value growth will come through additional features and differential price points.
Do you believe technology can significantly enhance the retail industry?
Indeed, technology operates on multiple fronts, such as in the integration of new features like augmented reality into our notebooks. This necessitates a robust technological infrastructure to ensure a consistent consumer experience.
Unless the technology is used to bring that experience to the consumer, that effort cannot reach its logical conclusion. So, technology, both in the form of hardware and software, as well as in terms of its applications and networks, will have to move in consonance to deliver the experience. It cannot be in isolation.
How have GST regulations impacted the stationery market in India?
This doesn’t seem to be focused on writing instruments at the moment. Currently, raw material costs are soaring, and consumer prices are significantly influenced by specific price points. If a ban is imposed, it’s not as simple as making the product appealing; there are limitations due to these price points set by the raw material costs, influenced by global situations.
Consider the example of crude oil, which impacts polymer pricing for plastic-moulded parts. The environment is volatile due to disruptions in the supply chains, and an oil shock could be imminent. This uncertainty affects the overall performance of the category.
Alongside the challenges of volatile material prices and supply chain disruptions, there’s a hurdle with the higher GST regime, especially in landlocked areas affecting price points. Unlike other
categories that can easily adjust prices in response to a 5 per cent cost increase, our category finds it challenging to pass on such increases to consumers.
