20 Sept 2017
Green Printing Set to Dominate the China Market
An Interview with Alice Liu, Account Manager, Fuji Xerox (China) Ltd
Printers and copiers are essential equipment for homes as well as offices. Green printing is becoming the underlying trend in the mainland printer market as people have growing awareness of environmental issues in recent years. Seeing the potential for this market, Fuji Xerox, headquartered in Tokyo, has introduced green elements into its products in a bid to become a trendsetter in the printer market.
Going All-Out to Invest in Eco-Friendly Market
Fuji Xerox first ventured into the mainland in 1995 and now has about 600 employees at its headquarters and a staff of about 200 people at its branches in other cities. It mainly targets corporate clients by supplying office appliances like printers and copiers. It also serves special clients such as factories or printer shops. It sought to transform its business and began marketing eco-friendly products about 10 years ago.
Today it has taken on a green image by completely replacing its original products with eco-friendly products five or six years ago. The company now has footholds in more than 30 mainland cities, including Shanghai, Beijing, Shenzhen, Guangzhou, Nanjing, Suzhou and Chengdu.
Sales Model Dependent on Degree of Urban Development
According to Alice Liu, Account Manager for Fuji Xerox (China), direct sales account for 70% of sales in the first- and second-tier cities. The company’s clients mainly include state-owned enterprises (such as government departments, financial and educational institutions), private enterprises (such as construction, advertising and design companies), and foreign companies. Clients in the first- and second-tier cities usually look for stand-alone or multi-functional systems and better after-sale services.
Liu said that the company does its best to satisfy clients’ needs in order to win their trust and loyalty, adding that in the third- and fourth-tier cities, the company delegates sales management to its agents. She said that clients in these cities have a preference for second-hand products, hoping to get real bargains. Small desktop machines are the most sought-after category.
Another channel is online sales, mainly targeting individually owned businesses. In Liu’s view, the advantage of online sales is convenience and low cost, because the selling process is simpler than at physical stores. Also, online customer service can completely do away with sales staff. She said: “There is no need for salespeople. We only need a customer service agent to answer customers’ enquiries before they buy our products, which makes the selling process much simpler.”
For customers, online shopping offers cheaper prices and is more convenient than shopping at physical stores. Liu said: “Customers find online shopping more convenient because they can browse all kinds of information online and make comparisons with other rival brands.”
Liu added that timeliness and the same level of service are of the utmost importance in any effort to provide customers with a better online shopping experience, saying: “In online shopping, people are more concerned about whether after-sale service is as speedy as in direct sales. Customers do not see salespersons when they do online shopping. They will have peace of mind about online shopping if they are assured that they can enjoy the same warranty and after-sale service as in offline shopping.”
Fuji Xerox mainly sells small machines online and its sales have increased significantly in the past five years.
Green and Eco-Friendly Products Take Centre Stage
Liu saw the green and eco-friendly philosophy as ‘icing on the cake’, saying: “There are millions of business enterprises in China and they all have electronic equipment like computers. Their power consumption is a costly item of operating expenditure. If your products can reduce energy consumption, businesses would be happy to give these a thought because they can directly reduce cost.”
In Liu’s view, the green concept will be a new trend. In addition to the cost factor, this is because more and more enterprises are now aware of their corporate responsibility. She said: “They think that besides creating wealth for themselves they also have to contribute something to society by conserving energy and protecting the environment.” Therefore, the green market has a great future.
Liu pointed out that first-, second- and third-tier cities are basically growing hand in hand. To keep up with changing demand in the market, Fuji Xerox updates its products once every three years to maintain its competitiveness. There is not much change in the number of brand owners in recent years, but all existing brands are increasing the number of their green and eco-friendly products.
Consumer Demand Becoming More Diversified
As printing technology becomes more advanced, consumer demand also becomes more diversified. Liu pointed out that consumers today expect more specialised functions in products, saying: “They expect faster speed, such as machines that are capable of printing 50 pages per minute to improve office efficiency.” Consumers also expect the machines to be more energy efficient, such as having the ability to quickly change from standby mode to print mode. Besides saving energy, this also cuts the printing time. Liu also noted that the colour printing performance is a factor that consumers consider.
Personalisation is the trend for after-sales service. Since most the products are sold to customers in the form of leasing/instalment sale, the quality of after-sale service becomes an important consideration for customers. Liu said that good after-sale service includes quick response, good door-to-door repair service, free replacement of toner cartridges and free maintenance.
Customers are more inclined to choose leading brands but have no preference for place of origin. Mainland customers value word-of-mouth more than certification by authoritative bodies. Liu believed that customers would want to see more intelligent machines in future, such as phone- or cloud-connected printers. Bundled sales of hardware and software will be more common. Brand advantage would become more obvious in future and consumers would be inclined to equate famous brands with professionalism. Liu also said that competitive products such as multi-functional machines would become more mass-oriented and have great prospects.
Brand Owner-Agent Collaboration
Liu said relations between Fuji Xerox and its agents are quite simple. After buying products at wholesale prices, an agent is responsible for all sales arrangements and after-sales service. The brand owner has very little involvement in these matters. For publicity and promotion, Liu said that these remain the job of the brand owner and the role of an agent is to make the necessary recommendations based on the needs of customers when selling the products.
Liu said that prices are fixed by the brand owner and agent by mutual agreement. In general, they depend on the order quantity. If an agent performs well in sales, it will be offered additional discounts. Successful co-operation between the brand owner and its agent depends to a large extent on products’ publicity and promotion as well as word-of-mouth.
New Brands Face Challenges in Tapping Mainland Market
In Liu’s view, the mainland market is mostly dominated by US and Japanese brands, making it difficult for new brands to gain access. However, Hong Kong companies still stand a chance if they are well prepared. They may consider building regional brands that mainly target third- and fourth-tier cities and sell smaller machines to small clients. They may also take advantage of the regional network of their agents to publicise their brands.
When looking for agents, Liu thought it best to choose single-brand agents, saying: “If they handle a lot of brands they may not be able to give your brand a fair share of attention.” Lastly, she advised Hong Kong companies against focusing on high-end products because this market segment is small and already dominated by big brands. By comparison, it is easier to gain a foothold selling smaller machines.