A Sea Change in Print Buying
Low costs don't come at the expense of quality, according to the researchers. "Most of the print buyers interviewed for the report said that the offshore printers they use produce print quality levels comparable to U.S. print vendors."
Strategies for Management explored several measures to gauge the scope of this challenge to domestic producers. For one, it notes that a survey done by Printing Industries of America (PIA) found 29 percent of respondents lost a print project to a foreign competitor in the first nine months of 2004, with 49 percent of those jobs going to China. The results were published in the December 2004 edition of PIA's "Economic & Print Market Flash Report." …
Other Side of the Coin
The report also considers the supply side of the equation in defining this challenge. "By the end of 2003, it was claimed that China had more than 92,000 printing companies. However, this includes all kinds of printing beyond commercial printing, such as textiles, packaging, sign making and all other things than can be imagined. Only about 5 percent of Chinese printing firms have fixed assets of $2 million or more. This is an indicator that the number of printers that can export in China is very limited.
"Much of China's printing industry is based in the Guangdong province, which has more than 15,000 printing firms—900 of which have foreign funding. Hong Kong has been a high-quality producer of print for quite some time. Now a large percentage of the printing plants in Hong Kong (and Taiwan) have relocated to Guangdong and improved the quality of Chinese printing overall.
"India is currently a small player in offshoring, but from what we discovered the country is poised to become a major offshore print competitor. … Since India's middle class is educated (and often technologically adept and English-speaking), Indian printers can offer graphic design inexpensively (at 30 percent or more savings), and in timeframes unheard of compared to U.S. standards."