How will the strategic alliance with Xerox help you further your goals to penetrate the Indian market?
John Bowen (JB): Sir Speedy is known as one of the pioneers to not only accept but adopt and evolve the quick print industry. We are one of the leaders in providing robust digital and offset printing, integrated marketing campaigns, data and mailing services, signage, promotional products, graphic design, and online services. The partnership will enable Sir Speedy to build up its India strategy and expand its footprint in the country by leveraging Xerox's indomitable strengths in technology and pan India reach.
Xerox has been globally associated with Sir Speedy since 30 years and helped them meet printing demands in the most efficient and cost controlled manner. We also have a service level agreement with them. It's a holistic relationship which makes both partners stronger. We are also currently discussing about the IT services Xerox can offer.
Chandrajit Narra (CN): Presently with presence in Hyderabad and Bangalore at four outlets, we plan to add over 20 franchisees by end of 2015. As part of this exercise, we along with Xerox India are organizing franchise meets in key metros. The first phase of this will be held in Delhi and Mumbai from 27-29 January, 2014.
Pankaj Kalra: Our partnership with Sir Speedy has been unique and we are glad to support them in their plans for expansion in India. They are a well networked team and have provided good services to their clients and we hope that they succeed on their future plans.
Do you believe that franchising is a better business proposition to adopt in the current turbulent economic times?
JB: I would hate to be an independent business house in current situation. Small businesses are finding no way to go. Printers running business on conventional business models are under serious threat. I suspect that the ability to communicate with the market and target prospective customers is limited. And franchising with a global partner would help them learn.
Franchising is a very interesting concept that has been very well embraced in America. People understood that they wanted to be in the business for themselves, but not by themselves. What they need is to adopt a business process, and that's where the franchise model comes in.
Some of our top franchisees in US pay us around 120,000USD a year. Why would you keep paying that money if it wouldn’t be profitable; especially, when you have the option of delinking from us after 20 years? Our renewal rates have been close to 90%. This is because a business leader should not only be able to understand where opportunity exist, but also develop it and nurture his business utilizing the opportunity.
CN: We have seen success in our business and this has prompted us to look at further expansion in India. We are continually expanding the products and services that we provide in order to meet not only the changes that are taking place in the market, but more importantly, respond quickly to the changing demands of our customers and prospects. Each of our four centre has about 150-200 customers. The typical franchise model targets on minimum 250 customers.
How has the quick print industry transformed over the years? What are the prominent trends that you have witnessed?
JB: The quick print industry found recognition in late 60s. Prior to that, everything was printed on big offset presses. We stepped into the quick printing industry with franchises at high street locations that catered to small and medium business houses’ print needs using one or two colour presses. We started with two franchises called Sir Speedy and PIP. PIP or Postal Instant Press meant prints which were instantly ready for mail. Then Xerox, introduced Xerography and slowly the evolution of digital printing began.
Today, offset printing is only 18-23% of our sales. Ten years ago, it was around 40%, and 15 years ago, it was around 75%. Short-run digital—firstly mono and then colour— has taken the majority share of our revenue. Digital is now capable of offering near offset quality, handle volumes, speed and efficiency, variable data etc.
Indian market faces two hurdles: price competitiveness and lack of skilled labour. How will you counter them?
CN: I have seen a shift towards price competitiveness to value competitiveness. Customers are now really prepared to pay money for value-addition. We always had a global digital network. Our companies in US send their electronic files all around the world. If we do not have an exact local or regional office, then we outsource it to one of Xerox’s Premium Partner Services partners. The biggest strength that Sir Speedy offers is standardisation.
JB: As far as lack of skilled labour is concerned, we sometime prefer to call ourselves a training company. We not only believe in finding the right people, but also training them. So around five years ago, we developed a university, where we teach a two-week in-house course to our franchisees and their employees about how to run a successful operation. Courses are available in short packs online 24x7 and on completion we give them a certificate. We have about 200 courses on that university. We can also assign an employee a course to follow and monitor it. In some courses, we also have online test.
We have been successful in markets which are similar to India such as Brazil, Indonesia, UAE, etc. Therefore, we are confident that it is the right moment to expand operations in India. One of the biggest challenges that we have seen here is that sometimes business owners have a shopkeeper mentality. We need to change that. The world is expecting you to adapt to the changing dynamics of the market and you must not disappoint the market. You will have to make efforts to change your strategy according to the demand of the market. The mountain won't come to Mohammad.