Office Supplies Australia Market Intelligence

Report Coverage

  • Australia's Office Products Supplier Landscape
  • Key Global Supplier Profile
  • Australia's Office Supplies Market Overview

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Regional Market Outlook on Office Supplies

  • The office supplies dealer's industry witnessed an annual decline of 1.9 percent from 2014 to 2018
  • The negative growth rate is due to decrease in the demand and prices of the paper-based products because of increased use of technology (i.e., use of computers, mobile phones, tablets, etc.), as companies are trying to reduce their spending on the office supplies products
  • Majority of the industry players have started investing in their respective online portals, in order to cut cost (save rental and operating costs) and increase their product offerings



Key Market Trends 

Increased M&A's

  • Australian Office supplies market is highly fragmented in nature. The local players in this region are trying to expand their service capabilities though partnerships and are also forming member groups in order to compete with the global players in the market.
  • Platinum equity acquired the Australian operations of both the major global players Staples and Office Depot. Staples has been reestablished as Winc and OfficeMax (subsidiary of Office Depot) continues to operate as a separate entity

Effect of Digitalization

  • The demand for paper based products for example - note books, books, diaries, files and folders, letters and notepads has been decreasing because of technological advancement, i.e. use of computers, mobile phone, I pads (for communication), and cloud computing/servers (for data storage). This had lead to the decrease in demand for paper based products like files, folders, copy papers, notepads, diaries, books, etc.

Online Ordering

  • Increase in online ordering trend has led to many retail super store closures. Arrival of e-commerce giants like Amazon and e-Bay in the B2B business has made the suppliers in this industry focus more on their online portals
  • Staples had to close around 300 stores in the year 2015 and it is planning to close 50 more this year in North America. Office Depot closed 20 stores in 2014 in Europe in order to reduce operational costs. Even the Local Australian Suppliers have invested on their online portals as buyers prefer to order online these days.

Impetus on Self-Branded Products

  • Suppliers prefer to sell self branded or locally manufactured products as they get higher profit margins. Buyers go in for local brands as they are 10 to 20 percent cheaper than the branded ones.  

Focus on eco-friendly products

  • Eco-friendly product is an emerging area, where most of the service providers are focusing to expand their product base. The traction for these products is largely supplier-driven, since they tend to keep a margin of 20 percent on these products. Again the procurement of these products completely depends on the willingness of the buyers as this may help companies to meet their sustainability requirements. 

Porter's Five Forces Analysis  

  • Large buyers have a strong buyer power, due to the large consolidated business volumes
  • Suppliers are trying to improve their supply and delivery capabilities to offer a holistic service portfolio and thereby gain some negotiation power

Supplier Power

  • Global suppliers do have presence in Australia but the market is still dominated by the local players
  • Consolidation via mergers, especially of dominant global suppliers like Office Max and Office Depot, has left buyers with very less options when it comes to global suppliers.

Barriers to New Entrants

  • Time required to establish a brand and compete with the existing global suppliers is very high to be able to sustain in the industry
  • But since the majority of the market share is with the local suppliers in Australia, barriers to enter the market will be low to medium

Intensity of Rivalry

  • The level of differentiation between products is very low and leads to an intense competition in terms of price, quality, service, delivery etc.
  • Since there are many local players in the market, switching costs will be very low which again instigates price wars in the market

Threat of Substitutes

  • Due to rapid digitalization, threat of substitution for certain paper based products and stationery items like notepads, files, folders, pens and paper has increased, as the usage of electronic items has become popular, convenient, and environment friendly

Buyer Power

  • Buyers when engaging with the local player enjoy medium to high bargaining power
  • Buyers, while engaging with the best-in-class suppliers, have a low to medium-buyer power in the region depending on the scale of buying from the supplier, due to lesser negotiation power as a result of industry consolidation

Australian Office Supplies Market Overview

  • The office supply market has consolidated, and there are fewer physical store locations, leading to more competition among office supply brands and retailers.
  • Smaller firms will form alliances to improve their purchasing power, lower costs, and improve profit margin.
  • Centralized purchasing associations, such as Trimega, permit office supplies to be acquired at a parallel cost to larger firms
  • They can provide superior customer service as a differentiator
  • Technology will continue to shrink the necessity for traditional office supplies.
  • Adoption of e-auctions and ERP integration is expected to increase, which could affect small retailers with less technological capabilities.
  • Demand for the industry’s core products, such as pens, paper, and toners, will continue to reduce as we further transform into a digitized environment.
  • Specialty office supply stores, like Lyreco, Office Max, etc., will face increased competition from discount department stores, like Kmart, Target Australia, etc., and e- commerce websites, like Amazon.
  • The global players do have a presence in this market but the Australian office suppliers market is dominated by the Australian suppliers.
  • The Australian nationwide players have the capabilities to provide both core and non- core office supplies products.
  • It helps to consolidate the supply base and a single contract can be made.
  • Hassle-free payments as the invoices will also be consolidated
  • Most of the local players do not have the capabilities to provide both core and non-core office products
  • The regional/local players have limited geographical reach.
  • Companies will have to deal with multiple vendors across Australia.

Why You Should Buy This Report

  • Information on the Australian office supplies market overview, key market trends and Porter’s five forces analysis of the Australian office supplies industry.
  • Supplier landscape, key supplier profiles, etc.
  • Best procurement practices, contract length, engagement models, in-house and other product consolidation strategies, KPIs and SLAs, etc.

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