Third party consumables have long been an issue for original equipment manufacturers (OEMs), as their lower price points undercut OEM sales and their proliferation reduces OEM market share. In an effort to combat the rise in these third party (non-OEM) consumables, many manufacturers have developed efforts to promote the use of original supplies, most often touting their superior print quality compared to non-OEM options. However, despite ongoing attempts to curb the introduction of such supplies, compatible cartridges, and often new brands, continue to come to market, especially in developing countries like Russia and China. Though this trend is not seen to the same extent in Brazil as in the other two regions, it remains helpful to investigate as a comparison.
Lately, there have been a large number of non-OEM ink cartridges entering the ecommerce channel in Russia and China, but how many months did the OEM options have before the first third party version hit the market. There are some similarities between the three regions across different printer brands, though the time-to-market varies by product.
For example, on average, it takes longer for the first HP-compatible third party cartridge to reach Russia and Brazil, though they are among the first to reach China. Conversely, Canon-compatible cartridges take on average the second longest time to reach China and Russia, but take the longest to reach Brazil. This is supported by the fact that there are a number of non-OEM HP products in the Brazil ecommerce market tracked by gap intelligence, and none for Canon. Epson has one of the shorter time-to-markets for the first non-OEM cartridges, as well as the largest number of third party cartridges available in the ecommerce channel.
Overall, Brazil is definitely least affected by these products, with the some of the longest periods of time between the introduction of the OEM and first third party option. Brazil also has by far the lowest number of non-OEM consumables, and the fewest number of non-OEM brands per product in the ecommerce channel. When comparing the number of months for the first non-OEM cartridge by compatible brand, nearly all brands take upwards of a year, on average, to hit the channel, with Maxprint’s time-to-market coming in at around two years. Among the primary reasons for Brazil’s low penetration of non-OEM supplies are the greater difficulty of entering the market, increased taxes and regulations, and higher costs of entrance, and therefore a higher end-user price, as well as the fact that it is generally less developed than the other countries, particularly with regard to ecommerce.
In Russia, with the exception of HP, many on the first non-OEM consumables arrive in ecommerce after about an average of one year following the OEM version debuts. With regard to consumable brand, Goodwill is often one of the first to bring a third party version to the channel. This aligns with the fact that the brand also has the highest number of non-OEM consumables available in the ecommerce market. However, Cactus has one of the longest times-to-market for the first non-OEM and the brand still retains a sizable piece of the market in terms of ecommerce product placements.
Lastly, China’s large ecommerce market is saturated with a significant number of non-OEM brands, though only several brands are highlighted*. The China market has some of the shortest periods of time between the OEM and first third party option. China also has by far the highest number of non-OEM brands per OEM product, due in large part to the significantly greater number of non-OEM brands in the channel. In addition to the fact that China is a very open market with fewer restrictions and regulations, many of the world’s non-OEM cartridges are manufactured in the region, making it easier for them to enter the market. Interestingly, most times-to-market in this region are significantly lower than one year, compared to nearly two years for some in Brazil, illustrating the significant impacts that can come from different levels of development.
While further trends are needed to determine whether the gap between OEM and the first non-OEM cartridge is contracting, greater improvements in infrastructure (especially in Brazil) and advancements in technology will likely close the distance in the future, though third party brands will need to be especially cautious of OEM lawsuits and other legal initiatives. However, as long as non-OEMs remain outside of the patent infringement zone, it is likely the more affordable options will become a larger part of consumers’ lives in developing countries, at least until quality becomes a larger priority.
*The time-to-market estimates focused only on products that were isolated based on the criteria that both the OEM and first non-OEM options debuted in the gap intelligence ecommerce channel after August 2009.