Acche Din for the print industry in 2019? - The Noel D'Cunha Sunday Column

By 15 Feb 2019

The Lok Sabha elections, cricket world cup, and IPL are the key drivers which will propel the total ad-ex in 2019 to Rs 80,678 crores in 2019. Print’s pie will be Rs 18,363 crores according to GroupM. Plus there was the Pro Middle Class Budget. A peek into the next few weeks ...

In this Sunday Column, PrintWeek India finds out if 2019 will a tempest or no

There were two Adex related reports very recently which predicted that 2019 will see a revival of adverting fortunes.

Media investment giant, GroupM in its report – This year, next year, forecasts that the total Adex will reach Rs 80,678 crores in 2019 of which 23% or Rs 18,363 crores will be print, a growth rate of 2.2%. Others include 48% from TV, 20% from digital, 4% each from radio and outdoor, and 1% from the cinema.

Globally, advertising expenditure is expected to grow at 3.6% in 2019.

Digital Adex is expected to grow by 30 per cent this year to reach Rs. 16,038 crores.   

Television's growth for the year is estimated to be 15% to reach Rs 38,612 crores.

Print is estimated to grow by 2.2% to reach Rs 18,368 crores. The hare of print to all media is expected to be at 23 per cent. Regional will see higher growth compared to English language print publications.

Radio will grow at 15% to reach Rs 3,116 crores according to the report GroupM estimates cinema advertising to grow at 25 per cent to reach 1,008 crores.

Outdoor will contribute Rs 3,536 crores and will grow at 10%. 

On the other hand, Zenith has forecast that the advertising spends of the country is expected to rise by 15% to Rs 72,169 crores in 2019. This rise is driven by the general election, cricket world cup and the Indian Premier League. For the print segment’s wide-format business, this will mean a good year.

The budget boost?

The budget 2019, or the fifth budget of the current government, termed an interim budget, to an extent was a limited version.

2019 will see, what is called, the mother of all general elections. So the Budget 2019 announced on 1 February 2019 had all the populism. It had something for the farmers, for the service and the general public.

According to the Finance Minister Piyush Goyal, the budget did not propose any change in the tax rate but only provided few rebates which will boost spending and help the economy.

When PrintWeek India spoke to CG Ramakrishnan, Group CEO at TechNova, and a finance expert, he was of the opinion that Rs 6,000 annual grant for small farmers may not be good enough, but – it’s a good start. “But when in government there’s a responsibility, so I guess they're trying to balance it. I'm not saying this is going to be the end of all evils. For farmers, it will never be.”

Ramakrishnan is bullish on India, which he says is USD 2.7 trillion economic today, will touch USD 5-trillion in five years, and then we'll touch USD 10- trillion in 2030. “That's a big dream.”

Printers speak

PrintWeek India spoke to a few print executives to find what’s their take on the two reports and the growth of print vis-à-vis their business, this is what they said.

Narendra Paruchuri of Pragati Group

We think that commercial printing growth would be not much. The growth of this printing will also depend a lot on the election. If favourable results are in, print will at about 5-7%.
As far as packaging is concerned, growth would be much higher. One the market is growing and two, many manufacturers have realised that packaging is adding value to their products. 
I would think a 15% growth in this area is quite possibly.

Amit Shah, Spectrum Scan, Vasai

The figures are mind-numbing. Please be assured about the India growth story.

The growth in advertisements will be mainly in digital space since we are in the period of digital transformation. The free or dirt cheap data availability to the mass population will certainly propel companies for greater penetration in tier-2  and tier -3 cities (our major growth driving space) with digital marketing.

Print and its allied products will witness growth but not the level of digital advertisements. This year due to the general election the spent on both the platform –digital and print will be very high. IPL and cricket world cup will add huge revenue to this too.

And in my opinion, there will be greater spent by telecom players this year since they can’t remain in a state of hibernation forever, as far as marketing is concerned.

Our growing and aspirational middle-class will be the biggest growth engine for FMCG and auto industry.

So overall the scenario is rosy and healthy for both the digital and print industries.

Rohan Rai, director business, Shree Pack Containers, Vasai

The growth of the print industry has been multifold in the last decade. But as we progress towards an era of digitalisation certain sectors of printing did see a decline. However, since our business is primarily healthcare printing it has been good for us and hoping it stays the same.

That said, the current economic fluctuations leading the rupee to hit its lowest against the dollar has made it very expensive and competitive purchasing and pricing in the printing business, as well as expansion plans, were affected due to high infrastructure and investment cost as our purchases are directly proportioned with the fluctuations.

Adi Jain of Paras Offset

Ad money to traditional print ads will continue to go down or grow very slowly as has been happening for the past few years. However, value-added print advertising that delivers a wow feeling to the average consumer will increase exponentially.
BTL Brand advertising through print that leverages innovative applications of print to stir consumer emotion and drive action - whether driving brand recall in the mind of the consumer or prodding customer action - will be very important.
We are focusing on value-added print to give more bang for the buck for our customers.

Samir Gulve of EFI

I would have to look deeper into some of the trends but the modest growth in print is not surprising to me. We are seeing more cross-media activities overall. Also even in India, you can notice a slowly emerging trend of tv viewing being hijacked by Netflix and Amazon prime...especially in millennials how do brands reach consumers? Mobile ad and display graphics would my bets.

Sam Patel of Arrow Digital

We too are very optimistic on print and investing heavily towards that.

Growth in the wide-format segments is dependent on the purchasing power of the middle and lower class; this has been stumped for the last two years and liquidity has not matched pace with the needs of the market.

We are seeing more customisation and willingness to spend more for better/different concepts and also greener products. There are many disruptive concepts due to digital printing; creative further needs for print.

B Prasad, Printech Digital Imaging

I have read those reports from Madison and ET. You got them right. I have been with couple of agencies in the country and they are all eagerly waiting for election announcement. The festive season was bit dull for the OOH, but print media is doing extremely well. The Ministry of Information and Broadcasting has announced 25% hike in print media. In 2018, DAVP alone directly had spent Rs 631-crore on print. Election spending may or may not account to FY2019 billings, if it doesn’t FY 19-20 first quarter is going to be a big billing for print, radio and digital. The current Kumbh Mela has given big boost for OOH and was on expected lines. Of course elections too will give some great numbers to us. We are gearing up for big numbers for our topline.

Pratik Shah of PrintStop

We have had a pretty good year so far and business is definitely on the rise. As far as the coming year is concerned though advertising revenue might increase because of elections and cricket, I am still not quite sure of general printing spends for the corporates. A fractured mandate in the elections could create potentially large issues for the economy and that makes predictions for the coming year quite tricky.

Pankaj Bhardwaj of Avery Dennison

We do see industry growing close to double digit in label and graphic materials business. Label business gains from increasing consumerism as well as technology conversion while graphics bus thrives on improving infra and organised retail.

Kamal Chopra of Foil Printers

Election is always a boon for printing industry, though in these days of electronic and digital media the overall growth may not be much as compared the old days. The percentage of Adex in print may not touch as high, because of ban for printing on flex and other non-conventional media and growth of AR, digital reproduction and mass availability of electronic media. Taking all probabilities in mind, I can forecast for a growth of 8% to 10% during 2019.

Snehangshu Ganguly of NK Gossain Printing Press / Libako Packaging

I personally believe that India in a mode of transition and we will experience a lot of changes and impulsive behaviour from consumers. 
The companies (manufacturers) with whom we are associated with, have experienced negative growth in the last two calendar years in terms of sales per unit. 
If you carefully analyse the market you will definitely experience 
-        Car sales have gone down. However, demand for Ola / Uber / Radio Taxis have seen significant growth
-        The restaurant as a business is unable to survive because of minimum footfall, however food delivery is increasing multifold.
-        Traders struggling, marketplaces thriving
-        Demand down but consumption up 
Most of our partners have shifted from quality focus to low-cost procurement. 
We are very sceptical on the market and expect visual merchandising/ electronic media to take advantage of the same.
The election campaign will definitely push the sales numbers of printers for the next three months which will be a temporary relief for sure.
The larger picture with some road map/ directions will be little clear after the election results are declared.

Data points for this Sunday Column was sourced from Campaign India.



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