The OOH and signage industry foresee many challenges
ahead. While the pandemic and subsequent lockdown had put enough damage to the industry there are many other challenges now in front of them. Even before the pandemic India’s relation with China worsened over border disputes and as a result shipment from China is on the decrease. Add to it the non-availability of containers for shipment is another crisis now. Most of the printing related machinery comes from China and it has severely affected the industry. Even if the shipment reaches Chennai port, there is delay in releasing the cargo as there are mandatory sanitising activities.
They call it ‘container imbalance.’ Usually when they sip a consignment to another country, they expect it to be used to ship another consignment back
And when exports vastly outstrip imports, you have
a bunch of containers piling up in one place and a deficit in another location creating what is called the container imbalance
home. Containers can go one way and return home whilst being productive at all times. And when exports vastly outstrip imports, you have a bunch of containers piling up in one place and a deficit in another location creating what is called the container imbalance.
Those who are in the industry say that the non-availability of spare parts has already made the prices high. The signage industry which had taken a
huge blow due to the pandemic and the lockdown now has to deal with this too. Many migrant labourers have returned
to their native place during the lockdown and as a result the industry face acute shortage of labourers for doing the flex installation works. Migrant labourers were involved in many activities from fixing
the printed flex in the frame to installing them over large billboards. They were also cheap when compared to the native people. Kerala has an estimated 2.5 to 3 million-strong migrant workforce across a wide spectrum of sectors including construction, agriculture and fishing. Over the last three decades, they have managed to plug the holes in the state’s labour force, becoming indispensable to the local economy.
“We are in a difficult situation as the production cost has increased more than
25% in the signage industry. We can’t increase the rate beyond 10-15% as the industry is recovering from the pandemic effect,” says an industry veteran in Kochi.
“Material cost of everything associated with the signage industry
has increased. The shipping cost has increased drastically. Earlier the shipping cost from China was $700 and now it has turned into $4500. Even then there is acute shortage of shipping containers. The availability of PVC resin is another problem. The shortage is so severe that
The industry estimates close to 25% increase in production cost by the next few months
the price increases each and every day. The price of steel is also increasing. All this put us in a very difficult situation,” says Mathew Varghese, Chairman, Lipi Marketing.
Industry experts believe that this
crisis will affect retail branding as well
as OOH advertising. OOH industry is already undergoing crisis and now with the increased price for raw materials
will become unattractive for advertisers. The ban on PVC flex has made the industry to switch over to eco-friendly and biodegradable cloth and paper material for printing. The price of it was higher than the PVC flex and now with the shortage the price will increase further.
The availability of paper and textile printing material is another issue.
Although few companies in India are engaged in the production of this new printing material, it isn’t enough to meet the demand of the industry. Also, the raw materials for making this come from China. As the shipment from China has decreased there could be an acute shortage and price hike in the future.
The signage industry is going to witness one of the biggest crises as the production cost increases. Advertisers and corporate companies who engage
in long term contracts will not be ready to change the rates in the future. Add to it the material shortage and the industry will have to spend double the amount to procure the items. The industry estimates close to 25% increase in production cost by the next few months.
The signage and OOH industry
also fear that advertisers will move over to digital marketing or TV advertising
as OOH advertising becomes more expensive. Digital marketing or TV, Radio advertising can challenge the OOH and signage industry as they don’t see any immediate hike of prices in any of their sectors.
“Government intervention to ease the formalities of shipment could only be the way ahead. Many state governments have also extended the validity of license to advertise on metros and public trains free of cost to the advertising agencies on the wake of pandemic. We hope government to temporarily suspend the license fee until the situation improves and strong intervention to bring back the migrant labourers and to procure raw materials,” says a signage unit owner at Kochi.