And it’s not just parents that keep busy dealing with their endless demands. Also a part of the back-to-school game are stationery suppliers whose business is getting more brisk than ever before.
City Times caught up with Rami F Rahimtulla, Vice President of Farook Stationery (FIS), the largest manufacturer of stationery in the Middle East and also wholesale dealer and importer of almost 15 leading international brands, to know how the buying habits of children and parents alike, have changed over the years, and its impact on the stationery industry.
To begin with, demands and choices of children appear to have risen with the market, which is witnessing a double-digit growth rate, thanks to UAE’s growing population, as per a study done a couple of weeks ago. Rahimtulla, a UAE national himself, told City Times that the UAE market is getting more developed and sophisticated now, with a definite increase in the number of categories.
“There is a huge growth in demand for art and hobby products. For instance, we have started marketing the Camlin brand only recently but the response is tremendous. As far as school items are concerned, the demand for computers and peripherals is shooting up. The same goes for designed photocopy paper and coloured labels, keyboards, mouse etc,” he said. On an average, a family in the UAE spends Dh500 on a student each year. UAE has an estimated 500,000 students, which makes stationery a Dh250-million market.
According to the Rahimtulla, today’s consumer is sure of what he wants. While the market for office stationery has always been brand-oriented, that for school is now getting more brand-conscious, trendy and innovative. “Kids are very attracted to characters, especially on backpacks, pencil cases and lunch boxes. In notebooks, it’s the quality that counts. Some years ago, people would go in for a product that was 15 per cent cheaper, but would not last enough. But now, the modern customer knows that if he opts for something cheap, it may not last until the end of the year. The whole idea now is that quality saves money,” he said, adding that there are art and hobby products coming from the Far East, which have quality problems of the colour fading off. But such distributors manage to sell by giving children special offers or by sponsoring events.
While the overall quantities purchased by parents and kids have gone up by leaps and bounds, the total amount spent on it does not seem to worry many, as prices are considered quite economical. However, sellers of products bearing pictures of famous characters are really pumping up the market.
“Kids and parents are willing to pay any high price for popular characters such as Spiderman. Barely a month after Spiderman was out in the cinemas, kids were rushing into stores asking for items with the character on it. And it’s a trend that will continue. Kids will be kids after all,” says Rahimtulla.
While computers are a one-time investment that is not seen by outsiders, and uniforms are standard for everyone, only stationery (back packs, notebooks, pens) allows students to express his identity and uniqueness, he added. While children go for fancy designs, parents opt for offers, bundles and cartoons. Hypermarkets are favoured as a one-stop shop for these items.
“Around 70 per cent of all retail sales are from the mass market, spurred by advertising. Parents follow ads and rush to the spot, but once there, it’s the kids who pick the products, their choice mainly based on characters,” revealed the study commissioned by FIS recently. The rapid expansion of the market has attracted newer players, who vie for every inch of space on the retail shelf. As a result of stiff competition, prices are the first casualty. Prices of most stationery products have more or less stagnated, leading to a squeeze in margins. “Margins are not very attractive now and the business is largely volume-driven,” says Rahimtulla.
Imports, at over 90 per cent, represent a huge chunk of the market. Given the exponential growth in the market, local manufacturers are growing big enough to cater to the needs to even sophisticated markets in Europe and the west. FIS, besides having 10 retail outlets locally and three manufacturing plants (the third is being set up at a cost of Dh10 million), supplies to 65 countries, including the GCC, having recently forayed into Europe. “We are exporting to a country like Germany, from where we used to import earlier. It’s an extremely quality-driven market. Africa is the good market too.” Rahimtulla gives the entire credit to his father who started FIS 25 years ago and has now handed over the baton to his son.
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