OPINION: FRAGMENTED OR DISTRIBUTED
Clive Denholm, chief operating officer of CMYKhub, says recent discussions about the fragmented print industry and its competitive capabilities warrant further examination.
"The print industry in Australia is far from being merely fragmented. It is a vibrant and competitive sector, characterised by a diverse array of players who are continually innovating and adapting to meet market demands.
The Australian print industry is valued at $6.4bn (source: IBIS). However, this figure includes food packaging and specialised print services for large businesses, which are managed by well-established companies.
The retail print market is likely closer to $2bn, depending on what is included. Retail print is primarily serviced by franchised stores and independent design and print businesses.
A recent article in Print21 quoted a global web-to-print operation asserting that the print industry is fragmented and lacks competitiveness, positioning a web-based mass customisation model as a better alternative.
In Australia, trade printers with advanced equipment and software equip resellers with the tools they need to stay ahead. This approach fosters a competitive environment where businesses can thrive based on their unique strengths and customer relationships.
There are strong franchise networks and independent print and design businesses that provide a combination of innovation, specialisation, and customer-centric approaches, driving growth and competition.
In this sector, rather than describing it as fragmented, I would characterise it as distributed—a positive and necessary aspect of the industry.
Consider a few scenarios:
A design studio in Esperance, WA, collaborates with the local council to produce a newsletter on recycled paper for ratepayers.
A franchised store in Sydney CBD delivers legal documents within two hours for a law firm.
An independent printer supports the local sports team and creates banners for other sponsors.
A design agency in Byron Bay, which designed the ambiance and fit-out for a local coffee shop, also produces labels for its food offerings.
In each of these cases, local presence, relationship-building, and an understanding of customer needs are crucial.
Take the example of the design agency and coffee shop: a four-person business cannot afford a $3m digital label solution or automated workflow. However, that’s where we come in, as a trade supplier supporting them with the resources they need.
Australia benefits from a range of high-quality trade printers, many of which are reinvesting in the industry.
At CMYKhub, we are so confident in the future of our trade customers that we are investing an additional $6.8 million in wide-format printing equipment and a new eight-colour Komori press for our purpose-built 6,700 sqm facility in Melbourne, due for completion in early 2025. CMYKhub is fortunate to have locations around Australia, which reduces freight times and increases our ability to support local resellers.
The synergy between small, community-focused design and print businesses with efficient trade printers creates an effective model in Australia.
While online design and web-based ordering have their place, they are best suited for micro-businesses. Although exact figures are unknown, I would estimate that the average order value is under $300. When it comes to design, try going online and using an AI logo designer or any of the online sites to design a logo. The ability to achieve high-quality design is nearly impossible compared with working with a talented designer.
There are exceptions and hybrid models that use a sales force to target businesses for print while operating online or managing corporate print via a dedicated portal. However, the strength and talent within distributed businesses should not be underestimated.
Being local, talented, and having relationships is powerful when combined with efficient manufacturing.
While consolidation in the market will occur, I believe that small independent businesses supported by trade operators can grow their market share, and the future looks promising."
At CMYKhub, as I am sure is the case with other trade suppliers, we are proud to support a thriving ecosystem of resellers who excel in this competitive landscape, proving that the industry is robust and full of potential."