SMS jabs hurting greeting cards firms more & more

It is estimated that about a billion short messaging service (SMS) were exchanged during the week between last Christmas and new year in India.

While this may be a good ring tone for cellular operators, it has definitely given the greeting cards businesses something to worry about.

Chand Das, chief executive, ITC Ltd- greeting, gifting and stationery business, told Business Standard that the greeting card industry's business was stagnant over the last three years, but this fiscal the industry has been witnessing a 10 per cent fall in business due to the SMS and multi messaging services (MMS).

Das says that while e-cards did have its negative impact on the growth of greeting card sales, the major impact has been felt from the growing popularity of SMS and MMS.

The reason is that youngsters are switching loyalty from greeting cards to SMS and MMS for their novelty value and convenience, he adds. By mid-2004, India had about 44.5 million mobile subscribers.

About 30 million greeting cards were sold during the seven days from Christmas to New year 2005 compared to over 33 million greeting cards sold for the same period one year ago. Mumbai, Delhi and Bangalore were the cities that largely contributed to the greeting card sales.

The Indian greeting card business is estimated to be around Rs 250 crore. The major players being Archies Greeting and Gifts Ltd, Hallmark and ITC's Expression greeting cards.

The last big entrant was ITC which entered the greeting card business in 2001. Das says that Expression's has about 20 per cent of the market share.

In this grim the scenario, moving forward ITC Expression is betting on its stationery segment to be its growth driver and Archies expects its gift division to be the major contributor to its turnover.