Korea Federation of Printing & Information Industry Cooperatives
1. Introduction (Slide1)
The Korea Chamber of Commerce and Industry recently conducted a survey regarding a state of new business establishment and a policy for 350 domestic enterprises. According to the findings from the survey, 86.4% say that new business establishments are definitely needed for steady growth of business while 13.6% saying that existing business seems to be enough and no need for new business. Most enterprises are seeing the importance of new business and that shows by how many explore new potential business opportunities, connected to the company's future profit, in other words, to enter the different market or to create a new market is an unavoidable task for such enterprises.
The printing industry cannot be an exception here. The sales growth rate of the publication, printing, and reproduction industry was below the middle size manufacturers' average and printing exports decreased 5.8% year over year recording 184.867 million US dollars in 2006. Additionally, the Public Procurement Service said that they will lower the unit price (a standard price set by the public agency) and that will narrow profit margins of the printing industry even further among fierce price competition.
This situation makes the general printing enterprises look for new business, which can bring higher profits, and the enterprises which persist in standard offset methods are also searching for ways to increase profits through additional and different methods.
2. The Growth of Digital Printing Industry (Slide2)
Businesses using digital printing machines are one of new and expanding business models, which show a high growth rate during the past several years in the domestic market. The business is more attractive as the application differentiates them from the existing offset printing methods and strengthens their overall offering by adding the advantages and versatility of digital printing. Digital printing in conjunction with IT and software industry creates a variety applications and this accelerates the growth of such new business. Popularization of digital cameras, spread of blogs, and the mass of customized products all together affect not only IT and software industry but also many other industries. The printing industry, a representative industry of communication is also affected and the expansion of the industry is making rapid progress on the back of ubiquitous network, which allows the connection to the network anytime and anywhere without any obstacles. This introduces the potential for various new business models, and these show rapid growth when being applied to digital printing machines, it will be examined here how local printing enterprises re-model their business in order to create higher profits.
3. The Growth of Korea Printing Industry (Slide3)
Seoul Metopolitan Government divided the city into four industrial regions to increase competitive power in 2006. Accordingly the city has established and promoted this specialized strategy in order to create a synergy effect by making connections among major bases in each industrial region. The printing industry is classified under a creative industry linked to a cluster including the Jewelery Industry, Choongmooro images, and Chongye cultural contents and is appointed as a regional specialized industry of Chung-gu, Seoul. Through this initiative the government and the city support the industry. Located in Seoul, the printing industry, together with the publication industry, accounts for 20% of the total manufacturing industry and becomes the major industry of Seoul.
Local printing industry has gradually developed due to the offset printing being in the center. Offset printing accounts for large proportions in the domestic printing market and recorded 52% in 2005. That was 4.7% down compare to 2000 and it is expected to be lowered 2% further to 50% in 2010. It means the offset market will show ?11.8% growth (negative growth) in total printing market between 2000 and 2010. Along with this, flexography, screen, and letterpress are also expected to show negative growth. On the other hand, gravure, digital and wide-format printing recorded 40%, 240%, 37% market growth rate in 2005 compare to 2000, respectively, and they are expected to continue to show steady growth.
4. Digital Printing Market (Slide4)
Digital Printing, especially, stands out with large growth. Digital printing showed 6.8% of market share in the domestic market in 2005 and it is expected to increase to 7.9% in 2010 and continue with even further steady growth.
5. Driving Force for Growing Digital Printing Market (Slide5)
The reasons for the rapid growth of the digital printing market in the local market can be summarized as followings.
First of all, the reliability of quality and speed of the equipment for digital printing has increased with technical enhancements since 2000. Introduction of good digital printing machines, which produce high quality comparable to standard offset. There was initial distrust of digital quality and market learned by mistakes and initially accepted the digital printing without any hesitation or consideration of quality or speed.
Second of all, there are today more applications. The digital printing was before recognized as a threat of breaking the offset printing's area. Now, it is accepted as a new business model, which is developing and forming a new market and not replacing the traditional offset printing methods. The use was limited to the printing of variable data or POD printing and now it is expanding even to the label and photo market. At the same time, it creates various business divisions, which are linked to the digital printing industry. It produces many applications as well by grafting onto the IT industry and it attracts more of investment into the digital printing market.
Third of all, the expectation of customers on the printing is changing. Before, the printed matter focused on its final design or on color quality. It is now more focused on the view of customers who purchase and use the products sold via the printing. The use of printed matter is now used as a marketing tool in a peer- to-peer method and is delivered to the customers, where in turn it will be connected to purchase and re-purchase of products. In other words, the effort to maximize the customers' satisfaction together with the cost effectiveness is in progress. Hence, demand on customized printing is continuously increasing and this in turn is expanding the digital printing markets growth.
Information technology and communication developments are the fourth reason. As PC and personal editing software continue to be popularized, information design and editing is becoming easier. Commonly used digital cameras and mobile phone cameras also create the demand on customized, easy and fast edit and print options. Accordingly this increases demand on small quantity of many kinds of printing with short lead times and digital printing is naturally accepted as the best solution for this model.
Lastly, non-professionals can operate the digital printing machines easily without any complicated process. Conventional printing methods required a specialized and educated engineer with an understanding of many processes. Relatively speaking, the digital printing machine only requires one person at a minimum and almost anyone can easily handle the machine with simple orientation. Hence, non-experts in printing also can start the business with minimum manpower.
The above five factors are the motivating powers for the local digital printing market.
6. Korean Digital Printing Market (Slide6)
The local digital printing market size has reached 94 million US dollars and 400 million US dollars in 2000 and 2005, respectively. The size is expected to grow by 343% and 556% compare to 2000 and 2005, respectively, to 600 million US dollars by 2010.
7. World Digital Printing Market (Slide7)
The digital printing market growth is not limited to Korean market. It is also shown in all around the world. The world digital market has shown a rapid growth and steady expansion since 2003. The market size including all electronic materials, home use, office use, and industrial accounted for 100 billion US dollars in 2006. In the center of the market, the electro-photography market size went over 50 billion US dollars and the small ink-jet market size also recorded 40 billion US dollars.
Digital printing's rapid growth and large market size was based on previously mentioned, popularized digital contents, mobile phones and digital cameras together with development of high-speed network or cable and wireless or wired internet network, which contributed to the wide use of online printing orders.
8. Advantage of Digital Printing (Slide9)
The good side of the digital printing is producing small quantities of many varieties within a short time limit, reasonable price for small quantities, no stocks since only required amount is printed, and is also easy to update or correct, even though the marginal rate is quite high when compared to conventional printing methods.
According to the experts, it is expected that the 20% of total printing work will be completed within 24 hours in 2010. It is impossible to handle the work within 24 hours with the conventional method and in other words, it will be the digital printing's share as being the best solution for small variety quantity within short period of time.
Cost reduction is possible by eliminating the printing plates and that offers the reasonable price for small quantity printing. The stock or the storage room for the stock is no longer needed and the disposal cost also is reduced since it is an on demand order.
Digital printing methods omit the process of making the printing plates, which is needed in the conventional printing method, so that the shortening delivery date and the cost reduction effect are possible. In addition to print variable information or personalized documents and to edit the contents freely is also a strength of digital print methods.
With these strengths of digital printing, the supply of the digital printing machines is showing a rapid growth accelerating with an increase of web based business. The digital printing industry expands its part by offering multimedia contents.
9. Business Opportunities of Digital Printing (Slide9)
Digital printing is providing a diverse business opportunity throughout many fields. Some of the fields which digital printing method is applied are books on demand or commercial printing where offset printing and hybrid printing can be used. Digital printing is becoming popular in producing marketing collateral, which is supplementary method to support the sales of a product or a service. Booklets or print materials for sales and product information (brochures or flyers), posters as well as signs, visual supplements for sales presentation, manuscripts for sales and demo's, product data sheet, whitepaper and others fall in this category. This field takes up about 1/3 of the digital printing industry, therefore accounting for the biggest portion of the industry. Direct mail or photography, labels and other printing fields are said to be fields where digital printing is widely applied. Especially the photography and labeling fields are fast growing nowadays.
10. Applications of Digital Printing (Slide10)
Looking closely into the printing industry, small quantity and various kinds of printing materials have been produced for many years, however due to the development of the speed and quality of digital printers 'print on demand' with ever more diverse applications is becoming more active and cost efficient. To generally review the flow of the digital prints development, the digital printing industry has been expanding its domain from copying, printing industry to niche printing industry, general printing industry, express printing industry and finally to publication printing industry.
In the Korean printing industry, there have been many changes in businesses utilizing digital printing since 2001. In 2001, the digital printing industry concentrated its market in copying and printing industry, in 2002, the effort to take over the niche market of printing materials for revision and drafts. Short thesis or manuals were digitally printed and starting in 2003, it has figured strongly in the on-demand publication industry. Since then, postage stamps, postcards and other printing fields have started printing using digital printers. In 2004, graduation albums, business cards and menu boards were printed and further more in 2005, express printing have become digital printing's ground. From 2006 to the present, digital printing is handling photo albums, magazines, DM for marketing, book covers, catalogs, invitation cards, gift certificates, out of press books, single copy books, barcodes and others.
11. Book on Demand Publishing Application 1(Slide11)
Books on demand publications using digital printers is already becoming popular. America's most popular internet bookstore as well as world's largest online B2B enterprise, Amazon.com, is seeking maximum customer service through books on demand publication already for many years. Their model is to receive orders through the internet on a publication or a portion of a publication which the customer wants, print it through the digital printer and then sell that. Such business models have been started in Korea since 2003 and are gaining success. Generally, it has become possible due to growing demand on small quantity publication printing, rare or out of press publications and self publishing personal books, as well as cooperation with IT and POD businesses.
Most of the domestic businesses specialized in books on demand publications obtain original copy from the copyright holder and edit it through imposition software and then through POD print it as much copies as are needed. These businesses have established databases of various publications and have established a direct sales network for small quantity publications and sales of out of stock press books.
The custom publication market is expected to increase to 38 billion pages in 2009, from a base of 20 billion pages in 2006, due to this the expansion of digital printing industry's size can be expected.
12. Books on Demand Application 1 (Slide12)
The general workflow of these businesses are as follows: receive manuscript through online submission, print the outer cover and inner material by using digital printers and finish the cycle of custom publication after bookbinding and some tailoring.
13. Books on Demand Application 2 (Slide13)
There are some cases where publications are out of stock, but also theses can be received through online orders and printed, published and sold on a copy by copy basis. One of the must successful models for such a case is the Korea Studies Information. This company digitizes various information contents and establishes a system in which anyone can utilize these contents without the interference of time and space and graft it with digital printing, maximizing the utilization of the digital printing.
This company made a contract with all of the domestic academic institutions on digitization and established a database, entering into agreement on transmission with 1,200 academic institutions and succeeded in developing a database of over 14 million pages of 2,500 academic articles from its first to last issue. It was a huge project of over 45 thousand independent volumes, developing a database which researchers and corporations can utilize at any moment.
This company is publishing paper books using e-books and digital printers. The customers make orders through Korea's largest portal site, Naver, and Yahoo or the company's own homepage, and according to customers' order, a book is published and sold.
This company has played a tremendous role within the publication industry by establishing the POD field as a new genre, and also by holding less than 10 copies of any publication in excess stock, this solved the excess stock problem and decreased the distribution cost.
14. Online POD Publishing System Workflow (Slide14)
Another example of online custom publication and printing is using internet to acquire elementary, middle and high school teachers as members and to produce and offer materials which the members demand. They are providing content allowing members to write and edit online by linking to school homepages. Orders received online are edited and revised then processed, printed digitally and finally delivered to the members.
Also, custom learning materials intended for elementary, middle and high school students are also good examples of the utilization of the digital printing.
15. Blook Publication for POD Printing Application (Slide15)
'Blook', which is a compound word of 'Blog', a single person internet media and 'book', stands for 'publishing writings, drawings and pictures in blogs or personal homepages' exemplifies the popularities of the POD printing through the internet. Blook was mostly about cooking, interior and other practical books in manual type, but recently it is expanding to various subjects as economy, computer and English education. Blook is being welcomed by publishers due to such reasons as it is above average contents reviewed by readers online and it is possible to find creative new writers instead of expensive old ones. It is now being grafted to digital POD printing by small quantity printing in 500 copies to 100 copies.
On the other hand, in connection with mobile communication companies, POD publishing is operated as an expansion of text message saving service.
16. Commercial Printing Application (Slide16)
Digital printing's application in commercial printing fields is very diverse. From instant business cards to catalogs, brochures, draft printings, stickers, labels, menu boards, sample bindings are some of the exponent examples of these products. Mostly it is in a form of instant POD material production service where planning, editing and printing is done and targeted to the final user. Orders of the products are done online and offline. Because it is possible to decide at the last minute the most efficient method for printing, economical operation of their equipment is realized. As customers demanding such services increase, Korean digital printing specialized businesses such as KinkosFedex will increase.
Meanwhile, there are some cases where businesses specialized in offset printing, import digital printers and utilize them as a subsidiary to their offset printing. However, these businesses apply controllable data by printing inner contents with offset printers and book covers with digital printers, and also utilize the digital printers as a proofing tool for the offset printers.
17. Variable Date Printing Application1 (Slide17)
Some of the major business items in this variable data printing field are securities, gift certificates, barcodes and variable numbering. In case of the gift certificate, it is produced online and offline and the customers make gift certificates using the desired design by uploading pictures or texts through internet, and it is delivered as a gift. Such businesses started since the end of 2003 and it is becoming more active with the partnership with large marts and department stores.
Printing barcodes and numbering using digital printing equipment first started by printing gift certificates and securities using conventional printing methods and then digitally printing barcodes and numberings after.
18. Variable Date Printing Application2 (Slide18)
Another application field using controllable data is publishing 'my own' postage stamps. Since 2001, Chaesunghwe foundation, a subsidiary organization of the Ministry of Communication, has been publishing 'my own' postage stamps using controllable data. Publishing 'my own' postage stamps was started in Australia in September, 1999 and it is now operated in many nations. In addition to the postage stamp business, Chaesunghwe foundation offers an additional service of customised post card publishing where orders of post cards with pictures, texts, and images that the customer wants are received online and it is then printed digitally and then delivered fully customized and 'on-time'.
19. Photo Printing Application (Slide19)
There are many limits to developing products using photographic papers in many ways such as cost, after processing, storing problems because compressed albums and pocket albums using photographic paper take up much space. Therefore, as a method to resolve this inconvenience and overcome its limits, high quality digital printers are utilized. This field is also emerging as a successful business model by utilizing both websites and digital printers. In utilizing the latest digital printing equipment, a large portion of equipment are concentrating in this field. The idea that anyone can create an album in a similar form of a book with ease and low cost, nailed in Korean publics mind the idea that pictures can be produced by printing, not developing, is becoming a realistic business item due to popularization of digital cameras and camera phones.
Such businesses receive production orders of pictures and albums on and off line in cooperation with LG's Imory, SK's Skopi, Olympus' MioDio and online portal sites or with well known studios, and they are expanding their businesses into custom calendars, albums and poster using pictures.
The crucial point of a production of a picture album is the quality of the picture as well as the process skill. Some of the businesses that are leading the picture industry using digital printing equipment are applying their own color management know-how in order to enhance the quality of digital printing, and this provides a satisfactory outcome to customers by creating a synergy effect with the technology and the output of the digital printing equipment.
20. Conclusions (Slide20)
As can be seen in a survey of 350 domestic companies on 'Our company's new business promotion condition and policy tasks', 86.4% of the answer being 'new business is essential for continuous growth', demands on development and investments on new business are absolute in Korean market. Such tendency and thoughts are affecting the Korean printing industry which has previously concentrated on offset printing and this change is now bringing about the growth in digital printing industry.
In accordance with the growth of the global digital printing industry, Korea's digital printing industry is showing 240% growth in 2005 compared to 2000 and it will continue to show continuous growth into the future.
The reason the growth of digital printing industry is accelerating is because the digital printing industry, which was conceived as subsidiary for the offset printing industry, is now creating new and diverse application fields and is also emerging as a successful business model in the printing industry. Other than conventional fields where POD and controllable data were applied, various applications targeting many new niche markets are being derived and especially in the production of marketing collateral printing which is used to support the sales of a product or service, digital printing is taking a big portion and it is growing bigger.
Many diverse kinds of printed product can be provided in time with many variable aspects, and this can be done in small quantities, it provides competitive pricing when compared to conventional printing methods, the fact there is also no excess stock, distribution costs can be saved because it is possible to print only the needed amount at needed time, because the editing and updating of the contents can be done easily without extra cost and time, and that a significantly higher marginal rate can be expected compared to the conventional printing method, these are emerging as the key merits of digital printing. Such merits have brought about a fast adoption and import rate of digital printing equipment to the market and by accelerating the growth of the digital printing industry with the increase of the web business, digital printing industry is contributing to the enlargement of the role of the printing industry in the aspect of providing multimedia contents.
Development of the IT industry and electronic publication is being grafted with digital printing and it is accelerating the growth of the digital printing industry by creating a synergy effect in both industries. Digital printing equipment's technological improvement in quality and speed is positively contributing here and the ubiquitous communication technology environment where connection to the network is possible at any time, space or computer and network conditions, is a also contributing factor in the development of digital printing.
Most of the leading businesses in digital printing are expanding their businesses effectively through partnership in connection with the blogs or online portal sites, and they are expected to show a big growth in the future.
The digital printing industry, which occupies 6.8% of domestic printing industry based on 2005, is expected to grow 7.9% in 2010 due to the development and improvement of such application fields, and considering the current growth, even greater growth can be expected.
2007/07/03 00:00:00