Dialogue with HP Indigo's Xu Shunan: Exploring opportunities in the "low penetration" zone of the 1.5 trillion market

HP Indigo/PWI Digital Printing Division General Manager for Greater China Xu Shun’an

Author | Huang Yu

The current printing industry is at a very delicate crossroads: on one hand, profit margins are being squeezed due to rising labor costs and raw material prices; on the other hand, the low penetration rate of digital printing hides enormous explosive potential.

Recently, during the 32nd South China International Printing Industry Exhibition, HP Indigo/PWI Digital Printing Division General Manager for Greater China Xu Shun’an and HP Indigo Asia-Pacific General Manager Arnon Goldman stated in an in-depth conversation with Wallstreetcn that digitalization, intelligent automation, and sustainability are becoming the core drivers of the industry’s transformation and upgrading.

Xu Shun’an admitted that the development trend of the printing industry over the past few years has been very clear, with the most prominent feature being the continuous rise in operating costs, prompting the industry to consider transformation and upgrading.

Meanwhile, changes in consumer habits are reshaping the entire industry structure. Young groups represented by the post-90s and post-00s no longer satisfy themselves with uniform products. Whether it’s daily beverages or consumer goods, they pursue high levels of personalization and customization.

For example, some tea brands have launched “blind box cups,” each printed with different styles of illustrations and meme slogans, attracting consumers to collect and share on social platforms, turning packaging into a “social currency” with topics, which in turn drives brands to continuously innovate and iterate on product packaging design.

This demand for “small quantities and diverse styles” is transmitted to the production side, leading to a large number of small batch orders, posing a huge challenge to traditional mass production models, and creating natural development opportunities for digital printing.

“Digital printing is very suitable for small batch, personalized, and customized production, with fast delivery and short time-to-market. This is a very clear consumer trend,” Xu Shun’an said.

Digital printing, as a printing method that does not require plates and directly prints electronic files onto substrates via digital devices, features quick startup, single-sheet printing, and flexible variable data, with response speed and small batch costs far superior to traditional offset printing.

However, an undeniable fact is that, despite years of digital wave advancement, the penetration rate of digital printing in China remains low. According to industry associations and third-party research data, the penetration rate in Europe and America has exceeded 20%, while in China, it is still less than 3% based on output.

In Xu Shun’an’s view, this huge gap precisely indicates an underestimated blue ocean worth hundreds of billions.

He pointed out that two or three years ago, the penetration rate of digital printing in China was only about 1%. It seems to have only increased by two percentage points, but considering that the overall market size of China’s printing industry has exceeded 1.5 trillion yuan, each percentage point increase corresponds to a market increment of over 100 billion yuan.

Currently, the low penetration rate is mainly due to “mindset” and “cost misconceptions” among printing companies.

Xu Shun’an told Wallstreetcn that many traditional companies still prefer to serve a few large brands, and their cost accounting only compares unit prices, ignoring the waste caused by high startup costs in traditional printing such as plate making and press adjustments, as well as the core advantages of digital printing in achieving “zero inventory” and “rapid delivery.”

Of course, the core target markets for digital printing are small batch, customized, and personalized scenarios. Large-scale production still primarily relies on traditional printing.

“After all, the unit cost for large-volume orders is still difficult for digital printing to match,” Xu said. Over the past decade, digital printing costs have significantly decreased, but when it will be comparable to traditional printing remains unpredictable.

From the domestic market perspective, although the overall share of digital printing is low, its market share is rapidly increasing, showing vigorous growth in commercial printing, label printing, personalized printing, and packaging.

Xu also introduced that HP dominates the domestic digital printing market: 30%-40% in commercial printing, about 70% in labels, nearly 100% in flexible packaging, and over 60% in folding cartons.

As digital printing develops rapidly, market competition is becoming increasingly fierce.

Xu believes that current competition mainly manifests in several dimensions: first, the most direct price wars, with hardware and ink prices lowered, even with models offering zero-down payment for equipment; second, competition in technology and equipment quality, which is a healthy competition as all are striving to improve product quality.

“Besides that, competition among digital printing customers is also fierce. Take flexible packaging as an example, about 90% of clients are concentrated in Guangdong, mainly handling overseas orders, and they compete fiercely with each other. This also prompts industry-wide reflection on how to avoid falling into vicious price wars,” he said.

Xu stated that for HP, the main competitors are still major international brands, but they also notice the rapid rise of domestic digital printing manufacturers. “They have advantages like lower costs and better localized service, and are gradually expanding into Southeast Asia and European and American markets.”

In the face of the rapid rise of domestic manufacturers and intense price competition, HP remains committed to a high-end positioning and an “end-to-end” solution strategy.

Xu pointed out that HP sells not just equipment but a closed-loop ecosystem connecting brands, designers, and production. In today’s context where sustainability shifts from an “option” to a “must-answer,” the environmentally friendly attributes of digital printing are becoming a compliance necessity for long-term corporate development.

He added that HP’s latest generation of equipment reduces energy consumption by about 24% to 26% compared to the previous generation, while significantly reducing ink and consumables waste.

Additionally, Xu mentioned that another core advantage of HP is continuous innovation. “We launch new products and solutions very quickly, with several new models iterated over just a few years. New technologies are rapidly integrated into products, bringing value to customers. I believe this is difficult for many competitors, especially domestic manufacturers, because it requires deep technical accumulation.”

Below is the full transcript (edited) of the dialogue between Wallstreetcn and Xu Shun’an, General Manager of HP Indigo/PWI Greater China and Arnon Goldman, General Manager of HP Indigo Asia-Pacific:

Q1: From an industry perspective, what are the main characteristics of the printing industry’s development over the past year?

Xu Shun’an: The development trends and characteristics of the printing industry over the past few years are quite clear. Specifically in China, labor costs have been rising steadily, and operational costs are also increasing. This is a very obvious trend. That’s why our industry is quite competitive internally—costs are rising sharply, and raw material prices are also increasing, squeezing profit margins.

As profits decline, competition among clients becomes more intense. This pushes many customers to think about how to transform and upgrade. This is a very clear feature—operating costs are all rising.

The second aspect relates to consumer trends. Changes on the consumer side are influencing the industry. The most obvious trend is the increasing demand for small batches, personalization, and customization. Young consumers—post-90s and post-00s—have completely different consumption habits from our generation. They value individuality and want products with their own characteristics, not the same as others. Even for coffee, they want it to be unique, and the same applies to other consumption.

This leads to a large number of small-batch demands, which presents a big challenge for the printing industry—how to respond quickly to the rapid changes and small batch needs from brands and consumers.

Of course, this is a challenge but also a huge opportunity for digital printing because digital printing is very suitable for small batch, personalized, and customized production, with fast delivery and short time-to-market. This is a very clear consumer trend.

Another point is that digital printing requires a certain market cultivation process. Chinese printing companies, especially leading ones, have been exposed to digital printing early on, but truly committing to transforming from traditional to digital printing has been difficult. This involves not only large investments but also changes in production habits and mindset.

Another aspect is the profit model, which many companies may not have fully considered. Digital printing and traditional printing are fundamentally different approaches; you cannot think of digital printing with the same mindset as traditional printing.

A related point aligns with the theme of this South China Printing Exhibition: continuous promotion of digitalization, intelligent automation, and sustainability. Sustainability in China, whether in printing or other industries, is no longer optional but a mandatory response—an essential part of corporate compliance and long-term development.

Sustainability isn’t just about using eco-friendly inks, materials, or reducing energy consumption; it also relates to business models. For example, digital printing eliminates the need for plates, reducing waste; small batch and on-demand production prevent large inventories and unsalable stock. It’s just-in-time printing with almost no waste, which is a major advantage in sustainability.

Now, with EU carbon tariffs, France’s mineral oil bans, and the US and European markets’ PFAS-Free requirements (materials free of fluorinated compounds), new demands are emerging for the industry. Digital printing fits these environmental and sustainability requirements very well. That’s the general trend.

These trends existed before but have accelerated significantly in recent years. Honestly, these are industry trends that have become especially prominent in the past few years, even months.

Q2: Compared to last year’s exhibition, what are the main features of the content exhibitors are focusing on this year?

Xu Shun’an: AI is now a hot topic everyone is discussing. Especially at HP Indigo, AI has been deeply integrated into our equipment, and we even provide AI assistants for customers. Each device has an AI assistant, which brings great convenience—from design to production management, AI is involved. This is a very clear trend.

Additionally, many booths are talking about sustainability, cost reduction, and efficiency improvement, aiming to reduce manual intervention and labor. Since recruiting workers is difficult—especially young people are reluctant to enter the printing industry—this is a very obvious change. Companies are trying to attract new young labor by increasing automation levels of their equipment.

Q3: What are the main trends in industry competition? What major initiatives are companies taking?

Xu Shun’an: Competition has always existed in this market, whether traditional or digital printing. Digital printing is developing rapidly, but competition is becoming fiercer. As a global leader in digital printing, HP Indigo can feel the pressure from market competition. But pressure is good—it pushes us to invest more in R&D and continuously innovate.

For HP, our main competitors are still major international brands. We welcome such competition. At the same time, we see domestic digital printing manufacturers rising quickly. They have advantages like lower costs and better localized services. They are gradually expanding into Southeast Asia and Western markets, which is a positive influence for Chinese digital printing companies.

We also hope more competitors will join. It’s not just competition; it’s about jointly cultivating the digital printing market. Only when more customers have more choices and see a clear future for digital printing will the industry accelerate its shift from traditional to digital.

Q4: With increasing industry competition, in what aspects do you feel the competition is most intense?

Xu Shun’an: The competition manifests in several ways: first, price wars—hardware and ink prices are being cut, even with models offering zero-down payment for equipment. This is the most direct price competition. The core is still about price.

Second, there’s competition in technology and equipment quality. This is a healthy competition—everyone is working to improve quality without lowering standards. This is a positive trend, and competition is indeed intensifying.

Third, competition among digital printing customers is also fierce. For example, about 90% of flexible packaging clients are in Guangdong, mainly handling overseas orders, and they compete with each other. This situation prompts industry-wide reflection on how to avoid falling into vicious price wars.

Q5: The penetration rate of digital printing in China is relatively low compared to other mature markets. Based on your latest data, what are the penetration rates in Europe/America and China?

Xu Shun’an: According to third-party research, the penetration rate in Europe and America has exceeded 20%, even higher. But in China, it’s still quite low—less than 3% based on output, according to industry associations and media reports. Of course, this is based on volume. Since digital printing commands higher prices, the share based on revenue or sales is actually higher than 3%. We know that digital print samples are priced much higher than traditional printing.

Q6: Has the 3% penetration rate improved compared to a few years ago?

Xu Shun’an: Yes, significantly. About two or three years ago, China’s digital printing penetration was just over 1%. Although it only increased by 1-2%, considering the total market size of over 1.5 trillion yuan, that one percentage point equals a market scale of over 100 billion yuan.

Q7: Why do you think the penetration rate in China remains low?

Xu Shun’an: From the customer’s perspective, they have some concerns. China is in a typical transition from traditional to digital printing. Most traditional companies find it hard to change their mindset—they still operate with traditional thinking, including order-taking methods. They are used to receiving orders through brand owners or other channels, which no longer align with digital printing models.

Digital printing is more about online orders—having a platform where customers, consumers, and small brands can place orders directly. Large traditional printers, especially big ones, only need to serve a few major brands. But brand owners’ demands are constantly changing—they want zero inventory, on-demand printing, and faster delivery. For example, if they have a new design, they want it on shelves within a week, which traditional printing finds hard to achieve.

Cost is another reason. Many printing customers believe digital printing is expensive. They compare the cost of printing a paper box or sheet with traditional methods—just a few cents—versus digital printing, which might cost a few dimes, a tenfold difference. This makes digital seem costly. But if they only need 100 copies, the situation changes.

Traditional printing involves plate making, proofing, press adjustments—these startup costs can be several thousand yuan. For 100 copies, the unit cost might be 10, 20, or 30 yuan. Digital printing can start from a single sheet, costing a few cents, even for ten sheets. The key is how to compare. It requires changing customer perceptions. Both HP Indigo and our peers are working hard to shift these perceptions.

Q8: What is HP’s market share in China’s digital printing market?

Xu Shun’an: In the digital printing field, HP holds an absolute leading position across various segments. In commercial printing, about 30%-40%. In labels, around 70%. In flexible packaging, nearly 100%. In folding cartons, over 60%. Digital flexible packaging solutions are fully mature only with HP Indigo. For folding cartons, although the market share is still small, it’s a huge market—almost all products need packaging, and HP’s share exceeds 60%.

Q9: Digital printing is more suitable for small batches and flexible production. For traditional large-volume production, is it difficult to promote transformation?

Xu Shun’an: Yes. Because digital printing’s target market is small batch, customized, and personalized. You can start from one sheet and have each one different—this is the core advantage. For large-volume production, traditional printing is still the first choice because of its lower unit costs at scale. Digital printing’s costs for large runs are still not competitive.

Q10: When will digital printing costs drop to match traditional printing?

Xu Shun’an: It’s hard to say exactly. But over the past decade, digital printing costs have decreased significantly. HP Indigo’s costs to customers have also dropped sharply because we keep innovating. Digital printing is inherently digital and intelligent, requiring continuous R&D investment, including new materials. As a result, our equipment and iterations improve, and the total cost of ownership (TCO) for customers decreases.

Cost reductions come from lower energy consumption—our latest HP Indigo 6K+ and 18K HD models consume about 24%-26% less energy than previous generations—and lower ink and consumables costs. We also use more environmentally friendly inks, which are cheaper and more efficient. Customers can clearly feel that costs have dropped substantially over the past ten years. Predicting when costs will be comparable to traditional printing remains challenging.

Q11: You mentioned that HP’s main competitors are still major international brands. But domestic manufacturers are rising fast. What is HP’s core advantage in maintaining leadership in China?

Xu Shun’an: Our core advantage is continuous innovation. We introduce new products and solutions very quickly—sometimes several models in just a few years. When new technologies emerge, we incorporate them into new products to bring value to customers. This rapid pace is hard for many competitors, especially domestic ones, to match because it requires deep technical expertise.

Another reason is that HP doesn’t just sell machines; we provide solutions. We’ve long emphasized that we sell not just equipment but end-to-end solutions—from design to brand integration. HP aims to connect brands and customers, helping them with sales and marketing. We show brands what our equipment and technology can do for their creativity and sales. They accept this because it benefits their business.

Q12: Under the AI wave, what are your main focus areas for ongoing innovation?

Xu Shun’an: Our R&D and innovation are driven by market needs and future predictions. One key direction is when digital printing costs will match traditional printing—this is a major focus. While we can’t say it will happen within ten years, it’s a clear goal. We aim to create value for customers by reducing their operating costs and providing additional benefits.

We’re developing next-generation inks and consumables that meet future environmental and compliance standards. For example, at this exhibition, we announced that around May or June, we will introduce new materials into China. These materials will reduce waste, lower consumables replacement frequency, decrease energy consumption, and reduce ink usage by about 16%. This means less maintenance, more production time, and less environmental impact—these are future innovation directions.

Q13: Do you have any practical AI application cases?

Xu Shun’an: Yes, many AI solutions are already implemented. Thanks to HP’s Silicon Valley roots, many AI technologies are integrated into our Indigo devices. For example, our HP laptops feature AI PCs. On the printing machines, AI helps in design—assisting designers with tasks that were previously difficult.

During production, AI can automatically identify and select optimal production modes. For instance, when a product arrives, AI quickly analyzes whether it needs three or four colors. For a colorful box, AI might determine that only CMY colors are needed, saving black ink and reducing costs by about 25%. It also speeds up printing because different colors have different printing speeds.

AI is also used for quality monitoring—like our AAA or CCC inspections, which are AI modules that monitor print quality in real-time. For managers, each machine has an HP AI assistant named Leo, which currently supports text input. For example, a printing manager can ask about the production status of two shifts yesterday, which shift had higher equipment efficiency, higher output, or less waste. Since all data is recorded, AI automatically analyzes and generates reports—just input a question, and it provides an answer.

Q14: As a global leader in digital printing, what are HP Indigo’s core strategies to further consolidate its leadership in the digital printing market?

Arnon Goldman: Our ability to stay at the forefront relies on a comprehensive product portfolio, continuous innovation with leading quality, and advantages like high productivity, multifunctionality, and durability—these align with core customer expectations. Our broad application coverage is unmatched. To my knowledge, no other company offers such a wide range of applications. This provides customers with high flexibility: they can rely on the same equipment to meet market demands and follow current trends—including eco-friendly solutions, customization, personalization, and small batch production. By continuously integrating AI and automation, and satisfying both explicit and latent customer needs, I believe we will maintain a strong leadership position.

Q15: What are your development expectations for the Asia-Pacific and Chinese markets by 2026?

Arnon Goldman: I believe China has been leading in growth speed, technological penetration, and innovation capacity. The Chinese market environment is always vibrant with innovation. We bring core technologies into China, but true innovation is driven by customers—they develop new applications, follow trends, and even set them.

I highly respect this dynamic ecosystem, which inspires us and the entire industry. I am very optimistic about 2026 and the future of China. From a broader perspective, Asia-Pacific is highly diverse: Japan, Korea, and other mature economies, as well as Southeast Asia, with China being particularly unique.

Some industries are more traditional, where our high-quality, offset-competitive performance plays a key role. Others are moving toward digitalization, driven by e-commerce, emphasizing customization, faster delivery, small batches, and even single-piece production. This trend is strengthening and will continue to be significant in China, Japan, and many other markets.

Every economy and industry has its own characteristics, but I believe we can serve all markets well across Asia. Compared to Europe and America, these economies grow faster, and urbanization accelerates. As the economy develops and demand for packaging products increases, the entire industry will benefit—including HP, the value we bring to markets, and the value our customers create for their end markets.

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