How Xerox turned its India business around

Xerox, once synonymous with photocopying, is trying to regain its lost glory in India by improving its pricing and logistics.

For the last three years, the company’s balance sheet has been in red, marred by management issues and lack of effective engagement with its business partners, who turned Xerox smaller than even those printing companies that entered India in the last couple of years.

“Frequent changes in the partner ecosystem and management are some reasons to have affected their business. Competitive price restructuring and flexibility in servicing products will be required to gain market share going forward,” said Gaurav Sharma, Research Manager (Enterprise & IPDS), at market research firm IDC. However, the firm is seeing a turnaround, after appointing its new managing director for India in June 2015.

Currency volatility “We had a period of three years before 2014-15 where we had profitability challenges. This was also the period of extreme currency volatility that increased the cost of our goods by 40-50 per cent purely on account of currency,” Ashraf El Arman, Managing Director, Xerox India, told BusinessLine .

“Though we took action, we could not outpace the impact of currency in the short-term. But over the long-term, our measured actions are helping us emerge stronger,” he said.

For FY15, Xerox India posted a 6 per cent profit on a revenue of ₹540 crore. The company re-launched its entry level printers in India and brought down the price point to ₹6,000, as against ₹10,000 to ₹12,000 last year.

Xerox also focused on its key areas of strength and profitable growth such as its digital printing business.

It launched new products in entry- to mid-level digital printing range, such as C60/70 and Versant series, in the price range of ₹12 lakh to ₹60 lakh and saw fair acceptance with over 150+ deployments in 2015 for C60/C70 alone. Currently, Xerox has a 25-30 per cent market share in the segment.

Demand creation Refocusing on its channel and pricing strategy has also helped the company.

“We fine-tuned our pricing, introduced new products more suited to customer requirements in India and invested in demand creation, particularly through participation in key industry events,” Arman said.

While the company cut down prices for many products, it also increased prices in many cases to tackle currency volatility and yet it was able to improve sales and profitability.

“While we did the price increment selectively and in areas where there was an opportunity, a critical element was to drive significantly higher efficiencies.

“We optimised our whole supply chain system to reduce the cost of warehousing, inventory carrying and transportation through better planning and streamlining of the warehousing facilities,” Arman said.

The company moved its master warehouse from Bengaluru to Mumbai, and coordinated with distributors so that the costs of warehousing were reduced. “These additional efficiencies helped us reduce the impact of currency significantly, allowing us to temper our price increases and remain price-competitive while protecting profitability,” Arman explained.

Workflow management In an increasingly paperless work, Xerox is now focusing its efforts in India on workflow management and document services.

“We are constantly educating enterprises and making them realise the potential savings and productivity enhancement that they can witness with optimised document workflow, possible through Xerox Document Management Services,” Arman said.

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