Mid-range sales up, high-end down: Effect of COVID-19 on the Indian fountain pen industry

“Kalamwaali bai.” The lady with the pen.

Nana Patekar’s pithy description of a journalist, played by Dimple Kapadia, in the 1994 film Krantiveer has recall value even now.

Kalamwaali Bai would have kamaalwaale options for a classic writing instrument today, given the number of Indian manufacturers making breathtaking fountain pens from materials such as bamboo and Edelharz Resin, and with evocative model names such as Black Cracked Ice and Koi Fish. But given the economic impact of COVID-19, she might choose a mid-range offering rather than a premium one. Dealers and manufacturers say that demand for expensive fountain pens (Rs 5000-plus) has gone down, but the entry-level and mid-range sales are strong.

“The number of pens selling has increased, whereas average order values have come down,” says Aditya Bhansali, who runs thepenworld.com, an online pen shop. “The sale of the number of pens in the above Rs 5000 bracket has significantly reduced. While a lot of new customers have come for the Rs 1000-2000 range.”

The strained relations between India and China further pushed customers towards choosing Indian pens.

“A lot of people ask us whether a pen is made in India or China, due to recent events,” Bhansali says. “For many retailers, if a pen was imported, it was a selling point. That’s turning on the head a little bit.”

The 26-year-old Bhansali is a mechanical engineer based in Chennai. He is as passionate about electric vehicles as fountain pens. Bhansali’s generation does everything on a phone or keyboard. It’s rare for them to use a pen, let alone a fountain pen. But Bhansali became a convert after a teacher, fed up with his poor handwriting at school, told him to use a fountain pen. Now it’s become his profession too. Apart from thepenworld.com, he has a premium stationery brand called Endless Works.

“The fountain pen did improve my handwriting,” Bhansali says. “And though I wouldn’t use it for property registration, I use it for everything else. You cannot go back to a ball pen once you start using a fountain pen.”

Many years removed from Bhansali are the Andhra-based Ratnam Pens, established in 1932 and regarded as the first Swadeshi fountain pen in India. They are the pioneers of the art, and their pens were famously used by MK Gandhi, Jawaharlal Nehru and many other Indian leaders. When German Chancellor Angela Merkel visited India last year, Prime Minister Modi gifted her a Ratnam pen.

Several Indian pen makers use imported components, such as nibs. But Ratnam is fully Indian. Interestingly, a German nib usually costs almost Rs 800 more than an Indian one, according to Vishal Singhi, a Kotak Mahindra banker who is the brain behind the India Pen Show and a collector of pens.

When moneycontrol.com rings up Ratnam Pens in Rajahmundry, Andhra Pradesh, a person who identifies himself as Siva K answers the phone. In broken Hindi, he says, “Kam hua hai, lekin chal raha hai.” (Business has reduced, but it’s going on.)

He doesn’t have exact numbers. “Sometimes we make 20 pens a day, sometimes ten. People contact us and then come to take their order,” Siva K says.

For Ranga Pens, a 50-year-old, export-driven brand based in Thiruvallur, the biggest change due to Covid was the disruption in supply chain. In the initial weeks of lockdown, flights were grounded, while couriers and postal services were compromised or prioritizing essentials.

“Ninety-five percent of our pens are exported. So the logistics were an issue for a while,” says MP Kandan, the son of Ranga Pens founder MS Pandurangan.  “There was also worry in the minds of customers about the safety of opening packages. But our volumes are high, and we don’t have labour costs. My father and I make pens with a few assistants. So we never hit rock bottom. And now it’s an opportunity for us to push up our domestic sales, even as the exports resume.”

Most industry insiders respect older brands for their history and their contribution to the field. But the perception is that they need to update their methods. Most importantly, they have to be on top of their online game. After all, many customers and dealers interested in Indian fountain pens are overseas. Besides, brick and mortar stationery stores charge a hefty commission to stock product.

“Typically, stores expect a 30-40 percent margin. That’s a lot,” says Singhi, whose uncle Arun Singhi is the founder of Lotus Pens.

From the numbers Singhi mentions, quality pen making seems a business with high gross profits but niche buyers.

“A 100 percent gross margin on mass-produced pens is quite common. Mass-produced in this context is when multiple units are made of one model. And the margins are even higher in more premium or personalised pens,” Singhi says.

In terms of volume, he says, “Vazir pens, for example, each costing Rs 2500, sold 400 pieces in the four months of the pandemic. Hundred pens in a month is a good number. Of course, the profitability of these companies differs on the basis of distribution channels, employee and overhead costs and marketing expenses.”

As for luxury pens, even five orders a month is healthy, says Singhi. “There’s been a sharp uptick in orders for premium pens. Constellation88 received 20 orders over four months for their handpainted pens, which are in the Rs 20,000 – Rs 50,000 price range. That’s a good number for that segment,” he says.

A few weeks ago, Professor Hetty Roessingh of the University of Calgary, who teaches vocabulary to students and has an eye on their cognition and motor skills, wrote an essay on the benefits of taking notes by hand. An Indian made fountain pen would make the task pleasant.