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Fuji Xerox refocuses its future reach

By Wang Xing (China Daily)
Updated: 2009-09-28 09:00

A Fuji Xerox machine, the Document Center C400, is on display at a Beijing trade fair. The company wants to expand its printing service business in China. [Asianewsphoto]

Fuji Xerox, one of the world's larger printer manufacturers, plans to significantly expand its printing service business in China to better meet customer needs.

"Although printing services only account for a small proportion of our revenues in China, it keeps up with double-digit growth every year," said Masataka Jo, president and chief executive officer of Fuji Xerox in China.

"That represents the future of our business," he said.

According to Fuji Xerox, printing services accounted for 9 percent of the company's revenues in China, with office printer products and consumer printing products accounting for 17 percent and 21 percent, respectively.

Costs for printing account for just 0.1 percent to 0.2 percent of a company's annual revenues, according to a survey by the research firm IDC.

But in some industries with more paperwork requirements, such as banking and insurance, the percentage can be much higher, IDC reported.

Fuji Xerox said that by using its printing service, companies can reduce printing costs by 10 percent to 30 percent.

To achieve that goal, Xerox will first analyze the printing demands of different departments within a company and determine the varieties and total number of printers that are needed.

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After considering existing printing facilities, Fuji Xerox will then help clients deploy printers in a way that achieves greater cost-efficiency, the company said.

All the daily maintenance will be taken care of by Fuji Xerox. The customers only need to pay for the printed pages or service fees.

Fuji Xerox said it recently clinched a printer service deal with Procter & Gamble, reducing the US-based company's document costs by 20 percent to 25 percent.

Masataka said that in some cases, Fuji Xerox will purchase and maintain all of its customer's printers.

"That could help them outsource all of their printing business and fully focus on their core business," he said.

According to IDC, printer shipments in China totaled 4.23 million in the first half of this year, a decrease of 11 percent over the same period last year, due to the economic slowdown. IDC projects that printer shipments in China will decline by 3.5 percent this year.

IDC analyst Chen Ying said printing services can help printer vendors strengthen business relationships with their customers.

Chen said under the current economic difficulties, more corporate users are expected to choose printing services to reduce costs.

Masataka said his company's printing service is mostly geared toward large enterprises with complicated printer devices and networks.

He said the company also will focus on promoting its document management service, which accounted for 40 percent of the company's total printing service revenue in China.

Masataka said the majority of its printing service in China is coming from multinational companies.

"But demands from domestic customers increased significantly, as they need to become as competent as their foreign rivals," he said.

Fuji Xerox's domestic customers include China Life and Ping An Insurance.

Profit margin

Masataka said the profit margin for Fuji Xerox's printing service is about at the same level of its printer business.

He said in mature markets such as the United States and Europe, equipment sales are starting to decline.

"If we only sell printers and not service, we will die sooner or later," he said, noting that the printing service eventually replacing the printer business is "just a matter of time".