Commercial Print Services

Global Commercial Print Services Industry Outlook

• The global commercial print market was valued at $725–730 billion in 2023 (E) and is forecasted to grow at a CAGR of ~0.6 percent and reach $730–734 billion in 2025(F)

• Regions such as North America and Western Europe and some parts of APAC, such as China and Japan, have high market maturity, and the commercial print market is expected to decline in North America and Western Europe, due to an increase in digitization

• The future growth of the commercial print industry would be driven by parts of APAC, the MEA, and LATAM, owing to considerably less internet penetration and a high customer base

Global Commercial Print Services - Market Maturity

• Commercial print penetration is still low outside Europe, North America and parts of APAC

• About 52–57 percent of the total commercial print market is contributed by the developed markets, such as North America and Europe. China and Japan are the next biggest markets

• The central and southern parts of APAC and parts of LATAM and the MEA are driving the commercial print market, owing to a large consumer base, increase in spending by buyers, and low internet penetration compared to the developed markets

Global Commercial Print Services - Industry Trends

• Commercial print service providers are increasing their service portfolios by adding value-added services, such as data management, BTL marketing consulting and 3D printing, in order to provide end-to-end solutions to buyers.

• With the help of digital printing machines, faster turnaround is possible, facilitating print-on-demand and hence, avoiding wastage to achieve cost savings.

Global Commercial Print - Drivers and Constraints

To counter the effect of the digitization of commercial print, service providers are adding value-added services, such as data management, consulting and e-publishing to retain their clients. However, major segments, such as labels, packaging materials and books for educational institutes, still have sustained demand

Drivers

• Value-added services: A wide range of value-added services, like mailing, fulfillment, consulting, graphic design and data management services, enables print suppliers to deliver innovative services to their buyers. Suppliers in the market are competing with each other by providing value-added services to their clients at competitive prices, and they help buyers consolidate multiple print-related activities to a single service provider

• Potential industry sectors: The demand for print services is primarily driven by the retail, financial services, publishing and food and beverage industries. Demand for on-demand print materials, packaging, wide-format printing, digital printing and other promotional materials by the retail, food and beverage industries is a key driver

• Eco-friendly practices: The introduction of eco-friendly practices, like soy ink instead of the traditional petroleum-based ink, has reduced the printing industry's impact on the environment and has helped both the buyers and suppliers control their carbon footprints

Constraints

• Increase in digitization: With the increase in digitization, it is expected that buyers will adopt more electronic versions of printing materials, such as e-annual reports, e-vouchers and e-catalogues, or use more online channels, like email, the internet or websites, rather than printing materials to target consumers, which, in turn, will affect the demand for print-related items

• Dependence on feedstock prices: The print industry is dependant on feedstock prices, such as the price of paper, inks, solvents, etc. Price fluctuations for these items have an impact on the print industry. The volatility of the raw material prices poses a risk to the buyers because it has a direct impact on the final prices

Printing Industry Forecast: Key Innovations

Marketers should consider the following innovations while engaging with a print management company or local printers. This would help companies to source the latest end-products in the print industry

Web-to-print

Clients, print designers can upload any document that needs to be printed to cloud services, get it printed by printers closest to where it is required.

On-demand Printing

As technological advancements are getting better it is easier for companies to print commercial print items in and around desired locations, in adequate amounts and get it delivered without any delay.

Digital Content Distribution

With the increase of web-to-print and on-demand printing, digital content distribution platforms are also gaining momentum. Downloading the content on requirement basis provides flexibility, and helps in brand uniformity.

3-D Printing

Printing is expanding from flat sheet printing to 3-D printing. Commercial printers are technically upgrading themselves to capitalize on the same. 3-D printed materials have greater likelihood of being noted.

Hybrid Print Technologies

Print industry is migrating towards integration with digital channels: computer-to-print plate automation. This technology allows the designer to send finished image files to electronic plates which can read them and help execute complex projects faster.

Software Innovation for Print Businesses

The graphic design software used in the pre-press stage has a wider range of tools and features enabling lean workflow, compatibility across different files and collaboration among designers across different geographies.

Supply Market Outlook: Supply Trends and Insights

Global supplier

Increased M&A

• As buyers are focusing more upon consolidation opportunities. For example: HH Global is in full swing in acquisitions and expansions worldwide. They acquired Alecom in 2019 and completed the acquisition of InnerWorkings in October 2020, which is considered as one of the major acquisitions in the commercial print industry. HH Global will acquire InnerWorkings for $3.00 per share in an all-cash transaction representing approximately $177 million in equity value. Also, they expanded their presence in LATAM with the opening of a new office in Panama City and the upgrading its Mexico City offices

• Shifting priorities: RR Donnelley has shifted some of the production at its packaging facilities in North Carolina and Mexico to create single-use face shields to protect businesses and communities across the country. The company is currently able to produce approximately a million pieces per week by completely automating the production cycle

Regional/ local supplier

• Value-added services: Tier-2 suppliers are increasingly including value-added services, such as warehousing and fulfilment, which decrease the lead time to market for the buyer

• Raising brand profile: Tier-2 suppliers are investing heavily in marketing their offerings to improve their brand perception. This has resulted in huge engagements during the pandemic as buyers prefers local/regional service providers

• Owing to the higher tariff rates and labor costs, the North American buyers started evaluating alternate locations like Vietnam and Mexico. There has been a huge demand for regional and local suppliers in Asia as well as in LATAM lately

Engagement trends

• Most-adopted model globally: Global and regional sourcing strategy and owing to the on-going pandemic, buyers' preference has changed to local service providers as well

• Why: To achieve spend visibility and cost savings

• Contract length: 3-4 years, with a contract extension option based on performance linked with SLAs

• Pricing strategy: There is an increased tendency to adopt a volume-based pricing model. The performance-based pricing model is also being looped to the project-based pricing model as a percentage of compensation in order to drive better results