Staples' diet
Business cards, letter heads and the like may appear like innocuous little odds and ends, but put them all together and you have a humungous market—one that’s pegged at $10 billion (nearly Rs 40,000 crore). It’s a pie the global majors in this business are finding difficult to ignore. The US-based Staples entered India through a licensing agreement with Pantaloon Retail and other biggies like Office Depot and Office Max may not be far behind.
And domestic players like Offix from the Today’s Writing Products stable are also set to flag off their ventures in this space.
Karwa, of course, has prior experience in the market through his startup Officedge, an online B2B office products company that was acquired by Pantaloon Retail earlier this year. Adds Rakesh Biyani, CEO, Pantaloon Retail: “The Staples brand will help us establish a presence in the office products market, which is growing at 15-20 per cent annually.” According to Biyani, the venture will invest Rs 250 crore by 2010 to set up its chain.
Staples stores, like their counterparts elsewhere globally, will offer a complete range of office stationery, office automation products including PCs and office furniture. In addition, these stores will have facility for in-shop printing of business cards, letterheads, invites and documents.
Staples Future, which is targeting 50 large format stores and 100 store-in-stores with projected revenues of $150 million by 2010, has the first-mover advantage but that might be for a brief period only. Snapping close on its heels is Offix, which is opening its first such store in Mumbai’s Malad suburb in January 2008. “Globally, offices spend around $200 (Rs 7,900) per employee annually on office stationery and related items whereas the corresponding figure for India is $50 (a little under Rs 2,000). So the scope here is immense,” observes Amit Mohta, COO, Today’s Writing Products.
However, Offix is banking more on catalogue sales to ramp up its growth. Mohta’s strategy is to gain strength from region to region through a central warehousing facility in each region—six are planned—coupled with wholesale retail, doorstep delivery and, later on, online sales and e-commerce. Offix has lined up Rs 200 crore for a pan-India store count of 500 in the next five years.
The other major player in the writing instruments category, Luxor, is also eyeing the segment. “We have already expanded outside the writing instruments market with our office stationery products and we will definitely enter the office products market,” says Pooja Jain, Executive Director, Luxor Writing Instruments. Foreign players like Office Depot, too, are eyeing an entry into the Indian market, though its spokesman said there was no specific plan at the moment. With India Inc. on a growth curve, that might soon change.
