Investing in Japan: Seiko Epson expects increasing demand for remote working

Sales pushed down by COVID-19 but demand for printers may grow

Seiko Epson Corporation provides products and related services for printing solutions, visual communications and wearable products etc. They include home printers, business printers, scanners, industrial inkjet printing systems, projectors and wearable products for sports and personal healthcare. 

The company was founded in 1942 and is headquartered in Suwa, Nagano prefecture. It is the largest company in the prefecture with more than 75,000 employees within its group and a well known company among Japanese for its excellent home printers. 

Seiko Epson is facing economic downturn caused by COVID-19 as other Japanese companies. Its consolidated financial results for the fiscal year ended in March 2020 showed that net sales were down 4% to 1,043.6 billion yen and net income incurred significant decrease of 86% to 7.7 billion yen. The forecast for the fiscal year ending March 2021 was not disclosed because the effects of COVID-19 cannot be predicted. 

Due to the impact of the new coronavirus, worldwide production and sales activities were stagnant causing less sales of Seiko Epson’s main products such as printers and projectors reducing its profit approximately 14 billion yen. On the other hand, in China, Europe and the United States, demand for home use printers is expected to grow thanks to increasing work from home employees and home based learning, so Seiko Epson is urgently recovering production and strengthening its sales system to meet those demand. 

In terms of production, business in China has almost resumed, but businesses in Southeast Asia and other areas still continue to be affected. To cope with the situation, Seiko Epson is moving its production bases to other sites and outsourcing its production.

Seiko Epson aims to grow in office printer market

Seiko Epson's share of worldwide shipments of A3 multifunction printers, MFPs, which are mainly used in offices, is only about 5%. Laser printers are dominating the office printer market and are said to account for three-quarters of A3 MFP share. 

This is a challenge as well as a great opportunity for Seiko Epson whose printer-related sales account for almost 70% of entire company sales and its printer products are specialized in inkjet printers. Seiko Epson aims to expand its share in the office market with its inkjet printers and overturn the stronghold of laser printers. 

The challenge is that Japanese home use printer market which has been a main market for Seiko Epson’s inkjet printers is almost matured. Home use printer sales have continued to decline in recent years. Smartphones induce people to send and receive data without printing any paper. 

The Opportunity is that its inkjet printers are ready to be used more often in offices thanks to improvements of image quality problems such as ink bleeding causing to be shunned at offices so far. Recent inkjet printers and inks have been improved and their image quality has become good enough for office use. Seiko Epson will keep working hard to replace laser printers in offices with its inkjet printers.