The Digital Market in China is Growing Rapidly

After it had long seemed that graphic companies in China would continue to focus on conventional manufacturing processes, the Chinese digital market has recently undergone rapid growth. In this blog post, Sven Olsen, Managing Director of the Asia Pacific region at Muller Martini, explains why this change came as a surprise to him, what reasons there are for this development, and how Muller Martini is preparing for it.
 
Until 12 to 18 months ago, most digital production systems in China, with a few exceptions, were “show lines.” By that I mean that they were basically systems that customers installed so they could claim to be in the digital printing business. Most of these systems were not operated commercially. However, that has changed dramatically in recent times. Today, we are seeing many of our conventional customers rushing to find out how they can set up commercial digital printing production.
 
A first highlight: Open house at Shengda Print Technology in Yongcheng
We recently took advantage of two excellent opportunities to showcase Muller Martini’s unique Smart Factory solutions live. The first highlight was the joint open house with HP at our digital flagship customer Shengda Print Technology in Yongcheng. This innovative company, one of the largest commercial printers in China, placed a large order at the last drupa for a SigmaLine Compact digital book block production system with an Antaro perfect binder, two Primera PRO saddle stitchers, and Prinova Digital as well as two PF7 Plowfolder book solutions from Hunkeler. This move is driving the company’s digital transformation forward at full speed.
 
We took advantage of the unique opportunity to present our Smart Factory solutions installed at Shengda Print Technology, live to 130 Chinese customers at the open house in Yongcheng. Although many of them had seen our innovative solutions live before, for most of them it was the first time they had experienced our Smart Factory systems in a production environment rather than at a trade show. Unsurprisingly, interest in our machines was high – especially in the Connex workflow system, which is crucial for efficient production processes with minimal manual intervention.
 
Visitors to the open house really appreciated that we took the time to talk to them to find out how and what they want to produce (which they don’t always know) and then show them the most suitable solutions from Muller Martini and Hunkeler. Thanks to the many contacts we made, we are confident that our business will benefit from this in the months to come.
 
A second highlight: China Print in Beijing
We met almost all of the open house visitors again at our booth at the five-day China Print in Beijing – the second highlight of this spring. From our perspective, it was an extremely successful trade show. Visitors were particularly impressed by the smooth live demonstration of variable digital book production on the SigmaLine Compact/Vareo PRO/InfiniTrim line.
 
The machines presented at our booth were already pre-sold and will be installed at customer sites in China in the coming weeks. The bestseller at the Beijing China International Exhibition Center was the Hunkeler Gen8, which we also presented live. Four customers decided to invest in this roll-to-stack solution, which impressed them with its high performance.
 
I was also delighted to attend a special event at the trade fair for a group of students from the Beijing Institute of Graphic Communication. We gave them a first-hand look at the latest developments in digital print finishing. For me, this was wonderful proof of the newly discovered interest younger people have in our industry.
 


I was surprised myself
After it had long looked as if graphic companies in China would continue to focus on conventional production processes, we have recently been proven wrong. To be honest, I was surprised myself by how fast things moved.
 
In my opinion, the change was primarily triggered by two developments. First, publishers began to reduce their order volumes and order more frequently, allowing them to maintain lower inventory levels. Second, I’ve noticed that small and medium-sized printing and finishing companies are struggling to manage smaller print runs on their conventional equipment. These short runs are now being shifted to digital printing and consolidated by digital printing specialists like Yongcheng Shengda.
 
While around 15 percent of the printed products manufactured in China are exported, digitally produced printed products are almost exclusively produced for the domestic market. The range is very diverse, extending from annual reports, brochures, foreign book titles, and catalogs to textbooks (especially for after-school classes).
 
We are well prepared for the change...
Muller Martini China is well prepared for the digital transformation – both in sales and technical service. We have a number of specialists who have acquired extensive expertise in our Smart Factory solutions through internal training, customer interactions, and relevant project work.
 
China Print showed that there are many lower-cost solutions for digital print finishing on the Chinese market. So while Muller Martini and Hunkeler may not be the solution that everyone can afford, we must continue to ensure that we offer solutions and brands that all customers aspire to own and use.
 
...and closely monitor developments
Even though the digital market is growing, conventional manufacturing will continue to play an important role in China. Not only do our customers have many high-volume orders that can be produced more efficiently on conventional equipment, but there will also be an ongoing battle between digital and conventional production lines over the print run length at which it makes sense to switch from one production type to the other.
 
“How will the graphic market in China develop over the next five to ten years?” I am often asked. Having already been wrong with my forecast for the digital market, I’ll refrain from predicting where we will be in five to ten years. But one thing is clear: We are monitoring developments closely and continue to offer our new and existing customers the systems and services they need to remain competitive in this market.
 
Yours,
Sven Olsen
Managing Director, Asia Pacific Region Muller Martini