ITC’s notebook biz banks on critical markets like Tamil Nadu

Having 300-odd stationery variants including notebooks and reminder pads, north India has been the fastest-growing region so far. Sharpening its south focus, a new campaign ‘Be Better than Yourself’ has been launched to target the school-going kids. Shailendra Tyagi, Divisional Chief Executive, Education-Stationery Products Business, ITC Ltd, shares insights on the market. 

The notebook segment grew 4-6% in the last decade. The market is estimated to be over Rs 7,500 Cr in consumer spends. The business plans to grow aggressively at higher double digits in the coming years.

The industry growth rate is consistent across India. North is the major contributor to the Notebook industry with 30% share, followed by West (25%) and South and East (22%). For ITC, North has been the fastest growing region in the last financial year.  The Southern region accounts for 22% of the notebook industry. TN contributes approximately 7% of the domestic market and is a critical region for ITC as Classmate (with substantial turnover) leads here and enjoys high consumer recall.

The notebook industry is fragmented with local and regional players. Today, the brand commands over 20% of the national share and a 5% - 15% price premium over the regional competitors. 

The number of notebooks used per capita in the rural markets is still low compared to cities. The rural markets are highly price sensitive, hence, there is proliferation of local brands in which, the paper quality and other product specifications like size and number of pages vary significantly from Classmate notebooks. The stationery retail channel is well defined and differentiated in the urban centres whereas there is a convergence of channels in the rural market with limited number of retailers selling both FMCG and stationery products. 

ITC stationery business started with the notebook segment in 2002 and has diversified into other complementary stationery categories of writing instruments, art stationery, scholastics products and in puzzles recently. Classmate anchors ITC’s paper value chain. The business is always open to and evaluating opportunities for expansion in current and new categories organically and inorganically. Acquisition is an option given the right price and strategic fit for the business. 

The business spends upwards of 5% of its turnover in marketing and brand building activities.