Regional  Market Outlook on Office Supplies in Europe

  • The office supplies market is highly fragmented and the maturity level of buyers and suppliers is very low outside Europe and North America
  • Suppliers in this industry have declining profit margins and are facing tight price competition. Digitization has led to many retail store closures of office supplies suppliers over the past five years. Price has become a key deciding factor, followed by geographic coverage and supply assurance
  • Suppliers are also improving their supply capability by adding more products and investing more in their online portals, and are also trying to increase their geographical scope

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Global Office Supplies Industry: Drivers and Constraints

 

Emphasis on self-branded products: Large suppliers, such as Staples and Office Depot, still bet on their self-branded products, as they have higher margins than other branded products. Staples, for instance, has generated 30 percent of its revenue in the recent years from these types of products and significantly increased the number of similar products being launched
Era of online ordering: These days, buyers prefer to order online, as it saves time and energy. Staples has already shifted its investments in its online portal to make online ordering more easy and convenient for its customers. Amazon Business and eBay have entered the office supplies market, as office supplies category fits into their existing sets of products offered

Drivers

  • Increasing service capabilities of suppliers: Suppliers in this industry are expanding their product portfolio by including non-core office supplies, such as janitorial supplies, technical equipment, and break room supplies in their product list
  • Increasing number of offices and job opportunities, mainly in the emerging markets: Focus on education, increasing literacy rates and increasing job opportunities, coupled with MNCs increasing their geographical capabilities across the globe (especially in the emerging markets), are the major drivers of the demand for office supplies products (e.g. the Digital India Campaign in India, and industrial development in LATAM, mainly in Mexico, Brazil, etc.)
  • e-Auctioning: Buyers prefer procurement through e-auctions, as they get clear visibility and can access supplier capabilities. Global suppliers have the ability to participate in e-auctions, and the local suppliers are also focusing on participating in them, as it gives them the scope to bid on and participate in huge tenders

Constarints

 

Decreasing demand for core office products

  • The demand for paper-based products (e.g., notebooks, books, diaries, files and folders, letters, and notepads) had been decreasing because of technological advancement, i.e., use of computers, mobile phone, iPads (for communication) and cloud computing/servers

Pricing pressure

  • The level of differentiation between products is very low and hence, the competition is primarily based on pricing. This drives down the profits of the suppliers, leading to exit from the market or being acquired by a larger company, resulting in consolidation