With vast areas of utility, new-age mobile electronic printers offer a promising opportunity
We are heading to an age where data mining and recording is becoming a priority. As more and more points of sale (POS) get mobile or connected to backend systems like ERPs, there is a need for
billing machines and mobile printers that can be attached to these billing devices. Be it any POS of a retail outlet, a government-owned transport corporation, a warehouse managing inventory, a bank, or even an organized parking lot, data is generated in the form of codes. Thus, these mobile billing machines with integrated printers are beginning to occupy the center stage. A big reason for this is data mining. Information generated can be used in churning out patterns, like customers’ habits, using the same to leverage resources to better use.
Simply put, mobile billing machines are basically handheld computers with embedded applications. The printers integrated within the machine are primarily of two types—thermal or dot matrix. Both have their own usages. For example, a thermal printer is used for generating tickets and receipts in transport services because thermal printing is faster as compared to dot matrix printing. Moreover, these printers do not require ink ribbons and use thermal paper. On the other hand, mobile dot matrix printers are used at various POS applications.
These printers are affordable because they are function-specific and embedded only with the required application. This also makes mobile printers risk-free and crash-proof.
| BASIC UTILITY |
| Electronic bus ticketing |
| Spot billing-cum-cash collection solutions for electricity board, cable TV operators |
| Banks coupons for services system |
| Vehicle parking receipts, petrol pumps |
| Toll gates on express highways |
| Inventory management at warehouses and stores (stock in and out readings) |
| POS terminals |
|
We talked to some vendors who are in this business already, and found out that these printers are roughly priced between Rs 5,000 to Rs 10,000 in the market with annual maintenance costs of around Rs 1,000 to Rs 1,500. These machines need servicing on the lines of placing fresh ink ribbons (for machines with integrated dot matrix printers), continuous supply of paper rolls, replacing batteries, etc.
| Product-related offshoot requirements |
| Ink ribbons for machines with integrated dot matrix printers |
| Thermal/regular paper rolls |
| Battery (lithium) |
| Regular servicing requirements |
| Other machine spare parts |
Who are the users?
Mobile electronic printers come into use across various POS—a government transport bus, private radio cabs, retail stores, banks, electricity boards, parking systems, toll gates on express highways, and so on. For example, with modernized banks making efforts to reduce the customer servicing waiting time, there are many branches that have deployed electronic printers to generate service coupons. More examples are: a billing machine kept at a Crossword store, buying tickets to watch a movie at any PVR Cinema, etc. Needless to say, with the constant increase in POS along the length and breadth of the country, handheld electronic printers hold a huge demand.
Who are the providers?
In India we have providers mostly in the form of importers and manufacturers. The number of importers of such machines, who further market such products, is much more than manufacturers. Furthermore, these handful manufacturers are heavily dependent on China for hardware requirements. However, there is another segment in this line of business, which is of developing embedded applications for these devices.
We spoke to some existing players to get inputs and insights on the subject. Among them are Softland India (Trivandrum) who claim to be a manufacturer of handheld electronic computers (used for billing purposes) as well as ticketing machines; Quantum Power Systems (Bangalore) who also manufacture such machines; and Krishna Electronics (Delhi) who are in the business of importing and selling electronic printers from Shanghai.
Big demand
As mentioned earlier, a POS can be a payment counter in a retail outlet while also a payment counter within a multiplex for buying movie tickets. There is a huge market in catering to the needs of such points.
Why? Electronic printers promote accountability and transparency as it keeps a record of all transactions. Besides, these printers also help POS such as retail outlets in data mining.
| Advantages of handheld printing machines |
| Convenience of handling and logging in information |
| Risk free from internal damages like viruses; crash-proof |
| Less dependence on manpower; no skill required to operate |
| Avoidance of data skipping; increases accountability and transparency |
| Information recorded can be accessed without fail |
| Optimization of recorded information |
With organized retail catching up in a big way, data mining is gradually gaining importance. Such new-age printers can be particularly useful in determining information of customers’ buying habits, repeat purchases, usage of discount schemes, frequency of purchases and more such information. These devices are further useful for various retail stores in examining the performance of their retail schemes, improving their customer relationship management (CRM) systems etc. Some of these devices are also used as an inventory management terminal between outlets and warehouses. For example, at Coffee Day Express, the manager feeds in opening and closing stock, which helps the head office to track stock of sold, unsold, damaged, returned products and much more.
The second best bet in this line of business is handheld machines for electronically generating tickets and receipts. Such machines are better known as electronic ticketing machines (ETMs). They are primarily used in government-owned state or city transport services. For example, the Delhi Transport Corporation has deployed such ticketing machines in some of its city buses. Then there are inter-city, inter-state buses or tourists buses that are also using such machines for issuing tickets to travelers.
Another section within the transport services would be private radio cabs. Each of these cabs has an internally deployed thermal printer for printing receipt against the payments made for the services. This is a form of spot billing.
For such similar spot billing purposes, various electricity boards have also started using handheld electronic printers. Such machines are fed with the old and new meter readings of the respective household and calculate the number of units and the electricity bill accordingly. Many electricity board officials prefer this mode of receiving payments as it encourages a quick and transparent way of billing. Even cable operators of small towns like Kanpur and Allahabad are opting for such handheld printers for spot billing purposes.
Electronic printers also come in handy in banks. For example, we notice a small though bulky looking printer hanging alongside the wall near the entrances in ICICI Bank branches. They are used in generating service receipts for customers. Customers operate these printers on their own as they are easy to use and self-explanatory. The specific service request is entered by pressing the keys, while the printer generates a paper coupon that mentions the service(s) desired along with time, date and a token code. This information can be used in compiling valuable data like what kind of services people prefer the most or if there are location-specific banking habits of customers.
Other areas where these printers are also deployed currently include organized parking lots, petrol pumps and toll gates on express highways and bridges across the country. Electronically fed information in these cases too can help derive out important conclusions like which days of the week witness maximum parking at a respective place, what time major traffic passes through a respective toll gate and so on.
Improving current deployment
The current deployment can improve by creating an awareness of the benefits that these printers provide such as reducing manual workload and time consumption, as well as saving on costs in the long term.
Apart from the organized retail outlets, retailers in the unorganized sector are also waking up and deploying such printers for electronic receipt generation. Hence, retail POS are likely to boost a dual-phased growth in the usage of mobile electronic printers. The local ‘kirana’ shop owners could realize a basic advantage of transparent and correct records in their daily transactions; while the big organized retail outlets are now looking forward to data mining for improving their CRM standards and figuring out new retail schemes.
Government-owned transport authorities are also opening up to the deployment of such printers. More buses are expected to issue electronically-generated tickets across states. Lalit Singhal, Krishna Electronics, says, “More than 90% tickets of the low-floor DTC buses are generated electronically.” He further adds, “Around 8 million tickets are generated on a monthly basis in DTC buses with an average price of Rs 5 to Rs 8 per ticket. With the usage of ETMs, there has been an increase of 25 to 30% in the revenues of DTC.” This highlights the round figure of at least 40 million recorded revenues generated by the state-owned transport corporation through this mode.
With modernizing banks, especially public sector banks, the deployment of such printers is likely to rise in huge numbers. Similarly, even other entities like state electricity boards, cable operators, petrol pumps and parking areas will look at optimizing this option.
Awareness, such as mentioned earlier, will certainly go a long way in improving the current deployment and also create new markets.
Current market potential
In a report by KPMG called “Indian Retail: Time to Change Lanes” (2009), B.S. Nagesh, MD, Shopper’s Stop mentions, “We have found that 50 to 55% of a customer’s experience revolves around two components: the availability of merchandise and the ease and speed of a billing process.”
The KPMG report estimates that the current penetration of organized retail in India is around 6% and is going to grow to 10.4% by 2012. The figures are calculated after considering the prevalent global slowdown in the retail sector. The report does not state the number of organized retail outlets currently in India, but pegs the current size to be around US$ 25 billion. According to our estimates, only within the franchisee space as POS, there were around 40,000 franchisees across sectors in India in 2008 (Refer: “The Power of Franchising”, DARE, June 2008).
Switching on to the larger share of the pie, there would be around 12 million individual retail outlets in the unorganized retail sector (Refer: “Why Big Retail is in a Mess”, DARE, April 2009).
On the public transport front, Softland India has provided 5,000 ETMs to the Kerala State Road Transport Corporation (KSRTC). For the current year, they have a contract of providing around 1,500 ETMs to Rajasthan State Road Transport Corporation (RSRTC). The lot will be provided at a cost of around Rs 5,500 per machine, which includes service charges for the first two years of the warranty period.
In another example, Krishna Electronics have a contract for providing 1,000 ETMs to the DTC since May 2008. The contract covers providing DTC with such mobile printers and its operation management and servicing too.
For a brief outlook of this space, we can look at the sizes of public transport of some major states of India. The Maharashtra State Road Transport Corporation (MSRTC), for instance, has an existing fleet of over 16,000 buses. Similarly, the Gujarat State Road Transport Corporation (GSRTC) has more than 4,000 buses under operation, Uttar Pradesh State Road Transport Corporation an existing fleet of around 7,000, RSRTC around 4,500, Karnataka State Road Transport Corporation around 8000, and KSRTC more than 5,000.
Another segment within this space would be the radio cab business, which is growing at an extraordinary rate in the big cities. DARE estimated the number of private cabs to go up to 20,000 in Delhi alone by 2010 (Refer: “Radio Cabs – A Business of Rs 7210 Crore”, DARE, October 2007). If we extrapolate this number to other metros too, we have a figure of 100,000 cabs. This translates to a requirement of the same number of electronic thermal printers.
Starting a business of mobile electronic printers
As mentioned in the beginning, manufacturing as well as importing-selling are two already existing forms of business that can be explored. While manufacturing will call for investment in a few million rupees, importing these devices and selling them domestically would not require much investment. The area of manufacturing itself could be either in the form of contractual hardware manufacturing (in which the parts/applications are imported from China) or complete manufacturing of the devices here in India itself (which would also include application development).
Besides manufacturing and selling these devices, there exists a good potential of business in manufacturing ink ribbons for dot matrix machines, thermal and regular paper rolls, batteries (lithium) and other spare parts. Also, the fact that these devices will require regular servicing creates an offshoot opportunity for service centers for these devices.
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