STATIONERY MARKET : How is it Now & Where its Headed?

Where is the stationery market headed? Fascinatingly, pencils are highly regarded as being mightier than pens because they can write 17.5 times longer than a pen can [1]. Paper clips were once used as a symbol of Nazi resistance by Norwegian troops [2], and as serendipity has it, post-it notes were actually an accidental invention [3].

Some of the staple items we encounter in our daily lives include stationeries. Those items we use on regular basis in the conduct of our lives, including workplace activities. Besides the common industry and sectors such as automotive, oil & gas, finance, etc., that revolve around market conversations and dominates economic attention, one could do little but inquisitively wonder about the current disposition endured by the stationery industry.

With an estimate of US$22.4 billion in 2020, the global stationery market size is expected to grow at a rate of 4.2% (CAGR) between 2020-2027 with an anticipated increase of nearly US$30 billion by the end of the said timespan. The market in Asia-Pacific alone is projected to account for US$3.8billion in growth by 2027 [4]. Local research contemplates Malaysia’s market to grow at around 4.2% (CAGR) between 2021-2028.

The Covid-19 pandemic, without a doubt, curtailed the progress of this industry much like most. However, ‘how are forces stacking up for and/or against the stationery market?’ is a curious picture worth pondering on.

The following are insights and perceptions gleaned from personnel from various functionality in the stationery market in Malaysia ranging from management, production, advertisement, marketing and promotion, finance and procurement, R&D, and supply chain.

Slowly & Steadily

Revenue Stream: Pre vs. Post-Pandemic Returns

It is widely perceived that the Stationery market is enduring a market rebound, albeit inmoderation. Following the stagnation due to the pandemic, wherein business and social activities were stunted abruptly, the ensuing easing and re-opening of activities helped reinstate the demand as the market recovers from the congestive shock. The surge in demand was noticed to be particularly greater with the resumption of schools and educational institutions in addition to exports of the products, which also seemed promising.

Ambiguity

Prospects Post-Pandemic

The factual adage “Nobody knows what the future holds” bodes well in this context as many perceive the future of the Stationery market remains bleak and uncertain as mostly attributed it to the uncertainty surrounding economic conditions.

Stationery State

Perceived Future of the Stationery Market

Stagnation perceived may be largely to do with the profile of the target market, locally and abroad (export destination) coupled with the beforementioned economic uncertainty. The current surge in demand understandably will not last long since what is experienced currently is the ‘backlog demand’. If export destination covers countries that are developed, then export stagnation is sure to follow since developed countries are starting to emphasize the use of electronic means.

Competitive pressure of the stationery market in Malaysia is as actively competitive as before. Partly could do with market entry reasons which are perceived to be highly convenient. Hence it is not surprising that rivals find each other straddling the same boat.

Retro Revival

Market Sentiment on Traditional Stationeries

However, in contrast to that idea (where everyone is seemingly interested in moving to more electronic means), the stationery market players believe otherwise. Consumers’ receptivity towards traditional stationeries like pens, pencils, colored pencils, erasers, papers, markers, highlighters, and the like is still intact and will likely remain over time. This is regardless of the institution (school or office). In schools, for instance, the traditional method of writing, drawing, coloring, and calculation is critical to the development and mastery of motor skills. Traditional Art, on the other hand, is a matter of preservation that involves a great extent of the use of traditional stationeries. The fact that we’re trying to conserve artistic knowledge would also imply the sustenance of traditional stationeries. Besides that, as humans we are subject to nostalgic experiences [5]. It is a common pattern where there comes a point in time when market sentiments are drawn to retro or in simpler terms, we generally dial back to vintage at times. The resurgence of the past does not only happen in the fashion industry. Nokia between 2017 and 2018, for instance, revived everybody’s favorite 3310 model and 8110 Matrix phone [6] which includes the classic Nokia Snake game. Dubbed the 1970s best-selling camera in the US, Polaroid went back to basics by re-introducing one of its classic models with a twist of innovation which eventually turned the bankruptcy-ridden company around [7]

e-Stationery

Insights on Switching from Traditional to Electronic

Overall consensus shows that it would be a bad idea to switch stationery products to completely electronic models just because everything is on the verge of digitalization. A wiser option would be to maintain a balanced combination of electronic and traditional stationery products (unless the strategy of a particular stationery producer is variety-based). The migration to a fully electronic stationery culture is a situation yet to have a pragmatic stand as futuristic as it may sound, especially with previously mentioned findings.

Market Headwinds

Foreseeable Hurdles

Inflation Pressure: Central banks of nations throughout the world are stepping-up for an austere monetary policy in the wake of rising prices, especially fuel and food. The IMF recently declared a revision (cut) in the global growth forecast for 2023 [8]. Businesses are not taking this signal as a good sign for future growth. With demand in the pipeline while austerity measures kick in, this may only decelerate whatever demand velocity that may exist as we navigate the recessionary storm in the upcoming months. In addition to that, investment sentiment is most likely to suffer a setback with investors holding back to see how things go as global business and economies brace for impact.

Pandemic: Covid-19 gave a hard-learned lesson to every aspect of life that we know of. It is becoming more and more concrete that such an event should be taken as a factor in decision-making henceforth. It is also becoming increasingly clear that Covid-19 is here to stay and people and businesses are coming to terms with the reality to live with it. Now is the time for firms to pivot their business model [9] in order to ensure survival and hone their capability on adapting to change.

Technological Growth: It would be an understatement to say that technological advancement will not hurt the future of this market. Because the changes we see today in technology are existential and omnipresent, it is pretty much everywhere. The digitalization of stationery-related products has been on the rise with people opting for devices to be interconnected with computers which are deemed to be contemporary, multi-tasking, and convenient when it comes to storage capacity since work could be saved virtually into computers, clouds, and servers. With this and observations before implying that traditional means would never go extinct, there seems to be a duel between pull-push factors in the development and future of stationery products concerning technology. Though perceived to be trivial, the effect of these is worth knowing likewise.

Accelerating Climate Change: Production of traditional stationeries involves basic commodities such as raw materials like wood and rubber. Although very rarely do we hear of protests outside of the factory of stationery manufacturers, it is quite notable the role it has on natural resources. More and more producers have been adopting the 5R (Refuse, Reduce, Reuse, Repurpose, Recycle) tagline not only as a mark of commitment to conserving nature but also as a relevant marketing slogan to keep current. As consumers’ buy-in becomes prominent, marketeers find ways to relate to that customer segment to display how much the manufacturers care for the environment. Manufacturers have been vying to move away from the use of natural resources by exploring reusable, recycled, eco-friendly materials like used paper or artificial wood and synthetic rubber. However, the exploitation of natural resources to make stationeries is set to continue unless; a complete list of reusable/recyclable or artificial materials for all the production of stationeries is discovered or the complete transformation to the digital domain.

Geopolitical Tensions: As manufacturing treads across borders, this is inevitable. With the recent war between Ukraine and Russia, tensions between US and China clearly have affected numerous market segments. China accounts for US$3.73 billion of office suppliers worldwide [10]. Grapple for power between the two world superpowers, if either country (US and China) decides to tighten its policy due to the ongoing dispute on trade activities this could mark a downturn and cause a chain reaction globally. Such effects are already taking place with the war between Ukraine-Russia [11].