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Our reporter Chen Jialan reports from Guangzhou

After shutting down its small digital camera factory in Zhuhai, China, Canon's Suzhou factory in China has also been involved in layoff rumors, which has attracted attention from the outside world. Recently, a netizen broke the news that Canon's Suzhou factory has started a new round of layoffs. Due to the shrinking market, the company's layoffs involve thousands of people.

Regarding the online rumors about layoffs and compensation, Canon China told a reporter from China Business News: "We have not received the latest information from the Japanese side yet." However, some people related to Canon said that this was "fake news and rumors." As of press time, the Suzhou Internet Joint Rumor Refuting Platform issued a statement: "After verification, the information is untrue."

It is understood that Canon Suzhou, whose full name is Canon (Suzhou) Co., Ltd., is a wholly-owned Japanese enterprise registered in Suzhou New District by Canon Inc. of Japan in 2001. With a total investment of US$185.5 million and an area of ​​320,000 square meters, it is one of the most important and largest office equipment production bases of Canon Japan overseas. Its main products are color digital multifunction machines, copiers, printers and peripheral equipment. Canon Suzhou said that its laser printers have an unshakable position in the OA field, and Canon's dark box technology and laser technology are widely used in offices and ordinary families.

Talking about the current development status of China's printer market, Wang Shana, senior research manager of IDC Asia Pacific, told reporters: "Printers have been widely used in people's work and life, and are an important booster of work and study efficiency. However, due to the impact of the macro economy, corporate procurement demand is not high, and household demand is not as ideal as expected. The overall market size is declining."

Printing business is Canon's largest business segment

In 2022, before the closure of Canon Zhuhai Factory, Canon had a total of 7 factories in mainland China, covering 4 major sectors. Among them, Canon Zhuhai Factory mainly involves small digital camera production lines and some parts, while Canon Suzhou Factory is mainly engaged in color digital MFP and black and white digital MFP business. Canon Dalian Factory is mainly engaged in the manufacture and recycling of toner cartridges, the manufacture of laser printer units, and the manufacture and sales of molds and tools. Zhongshan Factory is mainly engaged in the production of laser printers and laser multifunction all-in-one machines.

Now, the reporter learned from relevant persons from Canon China that after the closure of the Zhuhai factory in 2022, Canon's factories will be mainly concentrated in Suzhou, Dalian and Zhongshan. Among them, there are 3 factories in Dalian. Canon currently still has 6 factories in mainland China.

Canon Group's current revenue is mainly divided into four major segments, including printing business mainly based on printers and digital multifunction machines, imaging business, medical business and industrial business.

In fact, Canon Group started out with the imaging business. Against the backdrop of the imaging business being impacted by smartphones, the printing business has long supported the Canon Group's revenue.

By reviewing Canon’s financial reports, we can learn that as early as 2011, Canon’s “office products” revenue, centered on printers, accounted for 53.9% of the company’s total revenue.

Canon can be regarded as the founder of the era of plain paper copying. In 1967, when the Canon Group celebrated its 30th anniversary, it put forward the slogan of "Camera in the right hand, business machine in the left hand" to promote diversification. In 1968, Canon launched the original electronic photography method "Canon NP System" to open up the plain paper copier market. In 1970, Canon launched Japan's first plain paper copier NP-1100, and in 1985, it launched the world's first bubble jet inkjet printer BJ-80.

In the 20 years between 1970 and 1990, Canon's copiers and printers were frequently launched. It was also during this period that Canon established its position as a giant in the global printer market. The third quarter report of the global printer market released by IDC in 2023 shows that the top three brands in terms of global shipments in the third quarter are HP, Canon, and Epson. Among them, Canon shipped about 4.468 million units, with a market share of 22.9%. HP and Epson have market shares of 33% and 20.7%, respectively.

Canon's 2023 annual report shows that the group's turnover increased by 3.7% year-on-year to 418.0972 billion yen, and net profit increased by 8.4% year-on-year, of which the printing business revenue increased by 3.2% year-on-year to 234.61 billion yen.

The Canon Group's latest second quarter 2024 financial report data released on July 25 also showed that the quarter's turnover increased by 14.4% year-on-year to 1,167.786 billion yen, and net profit increased by 37.4% year-on-year. Among them, the printing business had a turnover of 654.5 billion yen in the quarter, a year-on-year increase of 13.8%, accounting for 56% of revenue. Canon mentioned that in terms of production-oriented digital printing systems, due to the strong sales of the image PRESS V series of color digital printing machines, the number of sales increased year-on-year. In terms of digital MFPs, due to the strong sales of the medium-speed color MFP image RUNNER ADVANCE DX C3900 series, the increase in the number of operating devices on the market has driven the growth of services, thereby achieving increased revenue.

Challenges in the Chinese market

Judging from Canon Group's recent performance, its printing business is still performing well, but the overall printer industry is also facing considerable challenges in the global and Chinese markets.

According to a report released by IDC, the global printer market shipments in the third quarter of 2023 were 19.5 million units, a year-on-year decrease of 7.9%. Among them, the United States, as the largest market, saw a year-on-year increase of 7.5%, while shipments in China and Western Europe fell by 20.5% and 11.6% respectively.

IDC said that the growth of the US market was mainly driven by Canon and Epson. Among them, Canon's growth was due to the recovery of the A4 color laser market, which was the segment that was most affected by the supply chain in the second quarter of 2021. IDC analyzed that the global economic downturn, user consumption downgrades, and extended procurement cycles have led to a significant decline in procurement demand. Cheng Yana, senior analyst at IDC China's Printing, Imaging and Document Solutions Research Department, also said that in 2023, both the printer consumer and commercial markets will decline year-on-year. In 2024, affected by the macro economy, market demand is expected to continue to decline slightly.

However, in the Chinese market in the first half of 2024, the printer industry has not yet seen recovery.

Data provided by Wang Shana to reporters showed that in the first half of 2024, the shipment volume of China's printing peripheral market was 7.402 million units, a year-on-year decrease of 19.1%. Among them, the shipment volume of inkjet printers was 3.300 million units, a year-on-year decrease of 21.8%; the shipment volume of laser printers was 3.638 million units, a year-on-year decrease of 15.1%; and the shipment volume of dot matrix printers was 463,000 units, a year-on-year decrease of 28.4%.

"Canon has always occupied an important market position in the printer market with its excellent print quality and durability. Canon's inkjet products had a domestic market share of 25.7% in 2023. In 2024, affected by the manufacturer's internal supply problems, the market share fell to 17.6%. In 2023, Canon's laser printer market share was approximately 5.9%. In the first half of 2024, Canon adjusted its product prices, with the price of key low-end color machines reduced, and the overall market share increased slightly to 6.4%." Wang Shana said.

Wang Shana analyzed to the reporter: "Canon's customers are mainly state-owned enterprises and Internet companies. It has a certain amount of industry customer resources and stable channel partners, but in recent years it has been under great competition from Chinese domestic printer brands."

In Canon's globalization strategy, Canon still attaches great importance to the Chinese market. In an interview with our reporter last year, Hideki Ozawa, chairman of Canon (China), said: "The goal I set for Canon (China) is to make China the region with the highest sales revenue among all regions of the Canon Group by 2035. Although Canon (China) is still lower than the United States, Europe, and Japan in terms of revenue, followed by China and Asia, we know that China has a long-term development plan for 2035, and by that time it will develop into the world's largest economy. If China formulates such a plan, Canon (China) should also follow China's pace to achieve the goal of leading the world. This is a long-term goal."

When talking about the Chinese printer market, a relevant person from Canon China told reporters that they expect the overall economic recovery to drive the recovery of the printer industry market.

(Editor: Wu Qing, Reviewer: Li Zhenghao, Proofreader: Yan Jingning)