Entering the European market for notebooks

The European market for notebooks is promising, but competition is strong. China continues to be a strong competitor, as do suppliers of locally produced notebooks in European countries. To enter the European market, your products need to comply with mandatory (legal) requirements as imposed by the European Union. Moreover, there are additional requirements that can be demanded by European buyers and which may enhance your chances for success.

1. What requirements must notebooks comply with to be allowed on the European market?

What are the mandatory requirements?

When exporting to Europe, you have to comply with the following legal requirements:

• General product safety
• Restricted chemicals: REACH
• Timber regulation

General product safety

Europe’s General Product Safety Directive states that all products marketed in Europe must be safe to use. It provides a framework for all legislation regarding specific products and issues. If there are no specific legal requirements established for your product and its use, the General Product Safety Directive still applies. If specific requirements do apply, the Directive applies in addition to those: it covers other safety aspects, which may not have been described specifically.

Unsafe products are rejected at the European border or withdrawn from the market. The European Union has introduced a rapid alert system (RAPEX) to list such products.

Restricted chemicals: REACH

The REACH regulation lists restricted chemical residues in products that are marketed in Europe. For notebooks, these residues can be the result of:

• chemicals used in paper production or recycling

• dyes used to decorate the paper
• chemicals used in coatings

Substances on the candidate list

Substances used for the production of notebooks might be on the REACH candidate list. The candidate list is a list of substances that may have serious effects on human health or the environment. Substances on the candidate list are also known as substances of very high concern and are candidates for eventual inclusion on the authorisation list. Once a substance is on the authorisation list, producers or importers from the European Union will need to apply for permission to continue using the substance after the date it was placed on the list.

Some of the substances might also have other restrictions; these substances are listed in REACH Annex XVII, a list of restricted chemicals.

What additional requirements do buyers often have?

Quality

Functionality is a basic quality requirement. This depends on:

• the flexibility and smoothness of the paper
• how the product is bound
• the thickness of the paper

How the paper absorbs ink from pens also affects functionality. On some types of paper, the ink from fountain pens can stain. This makes recycled cotton paper unsuitable for fountain pens, for example.

As a standard, notebooks should have at least 30 unlined pages. Common sizes are A4 – A7 paper, based on ISO 216:2007 trimmed sizes of writing paper and certain classes of printed matter.

Handmade items may slightly differ from each other. However, buyers demand a certain minimum quality level. They do not accept substantial variations. You should provide your importers with a range to make them aware that some variation is possible.

A special point of attention is avoidance of mould. You need to properly dry the paper after production in order to prevent mould. Condensation inside the container during transport can also cause mould. This is caused by humid air that becomes colder at night and warmer during the day.

Labelling

Information on the outer packaging of notebooks should correspond to the packing list sent to the importer.

External packaging labels for notebooks should include the following:

• producer
• consignee
• material used
• quantity
• size
• volume
• caution signs

Your buyers will specify what information they need on the product labels or on the item itself (e.g. logos or 'Made in…' information). This is generally part of the order specifications. In general, the English language is used for labelling, unless your buyer indicates otherwise. Lastly, EAN codes or barcodes on the product label are common in Europe.

Packaging

You should pack notebooks according to the importer’s instructions. Importers have their own specific requirements which they will generally include in the order specifications. These will likely include:

• the use of packaging materials
• weight and dimensions

• filling boxes
• palletisation
• stowing containers

First of all, the packaging should minimise the risk of damage caused by impacts. You should make sure the items inside a cardboard box cannot damage each other. Bubble wrap or paper is generally used for this purpose. The packaging should also prevent damage to the boxes when they are stacked inside the container.

Second, packaging must be easy to handle in terms of dimensions and weight. Standards are often related to labour regulations at the point of destination and must be specified by the buyer.

Third, packing should be optimised to reduce transportation costs. You should avoid using excess materials or shipping ‘air’. Waste removal is a cost for buyers. You can reduce the amount and diversity of packing materials by:

• partitioning inside the boxes, using folded cardboard
• matching inner and outer boxes by using standard sizes
• maximising pallet space
• considering packing and logistical requirements when designing your products
• asking the buyer for alternatives

When it comes to packaging material, importers are increasingly banning wooden crating and packaging. This is due to the high cost of the material and concerns regarding sustainability and disposal. Economical and sustainable packaging materials are more popular. Using biodegradable packing materials can be a market opportunity. For some buyers, it can even be a requirement.

In terms of consumer packaging, the requirements are quite simple. Retailers usually present notebooks without any packaging. This allows consumers to try them out and feel the material. A paper sleeve cover or wrapper around the notebook often communicates its special features.

Sustainability

Social and environmental sustainability make your products stand out on the European market. Examples include sustainable raw materials like recycled paper or alternative natural fibres, and sustainable production processes. A case in point is the bleaching of paper. Due to the negative impact of chlorine on the environment, alternatives are increasingly being sought and implemented for non-chlorine bleaching (e.g. bleaching by using hydrogen peroxide or oxygen).

European buyers increasingly demand the following certification schemes:

Business Social Compliance Initiative (BSCI): European retailers developed this initiative to improve social conditions in sourcing countries. They expect their suppliers to comply with the BSCI Code of Conduct. To prove compliance, the importer can request an audit of your production process. Once a company is audited, it is included in a database for all BSCI participants.

Ethical Trading Initiative (ETI): This initiative is an alliance of companies, trade unions and voluntary organisations. It aims to improve the working lives of people across the globe that make or grow consumer goods.

You can use standards such as ISO 14001 and SA 8000 and read up on sustainable options. However, only niche market buyers demand compliance with such standards.

Payment terms

The payment term is usually agreed upon with the buyer in the order contract. Payment terms vary from buyer to buyer and are related to the volume and value of the order, the type of distribution partner, whether or not an agent is acting as an intermediary, and what delivery terms apply. In general, the payment term will be 30 or 60 days after receipt of the goods or the date of the invoice.

Occasionally a deposit or advance payment can be agreed upon. This happens, for example, in Fair Trade business relations. Certain sourcing countries have regulations stipulating 100% prepayment before delivery. This can hamper business, as buyers usually shy away from such costs or will negotiate a harder price deal.

A special form of financial security is offered by Letters of Credit. A Letter of Credit is a letter from the buyer’s bank to the seller’s bank guaranteeing that the buyer's payment to the seller will be received on time and for the correct amount. The so-called L/C is often used in first transactions, but it is an expensive system and therefore not preferred by European buyers.

The payment terms are the outcome of your negotiations about the risks involved in export trade, particularly the following:

• financial risk (who funds what part of the production and transport process?)
• transportation risk (if damage or loss occurs, who pays?)
• the transfer of ownership (when do the goods change hands?)

A balanced outcome is in the interest of both the seller and the buyer and is the result of a process of negotiation.   

If the payment term is not covered in the contract, you can refer to European Directive 2011/7/EU. This Directive was established to protect SMEs against late payment. Although in principle this Directive does not apply to companies outside the European Union, you can use these terms as covered in the Directive as a guideline:

• If no payment term is agreed to in the contract (or General Terms & Conditions), then 30 calendar days after receipt of the invoice.
• If the date of receipt of the invoice is not determined, then 30 calendar days after receipt of the goods and/or services.
• If the invoice is received before the goods and/or services, then 30 calendar days after receipt of the goods and/or services.
• If a verification or acceptance procedure is agreed to with regard to conformity, then 30 calendar days after the date this procedure is completed.
• A verification or acceptance procedure may not take longer than 30 calendar days.
• Payment terms in Europe that are set in a contract may not be longer than 60 calendar days unless otherwise expressly agreed.

Delivery terms

Delivery terms depend on the type of distribution partner and respective preferences as to physical distribution. Importers will prefer FOB (Free On Board) or FCA (Free Carrier) arrangements. FOB is restricted to goods transported by sea or inland waterway. It means that the seller pays for transportation of the goods to the port of shipment, plus loading costs. The buyer pays the cost of marine freight transport, insurance, unloading and transportation from the arrival port to the final destination. FCA can be used for any transportation mode. It means that the seller fulfils his obligation to deliver when he has handed over the goods, cleared for export, into the charge of the carrier designated by the buyer at the specified place or point.

Retail multiples can ask for CIF (Cost Insurance Freight). That means they will ask you to include the shipping and insurance charges in your quotation. Small retailers may go a step further and ask you to arrange for the goods to be delivered to their doorstep. The delivery terms for DDP (Delivered Duty Paid) may then be negotiated. For importers who consolidate orders in your country, Ex Works (EXW) terms are often best. 

Details about the rights and obligations of the buyer and the seller under the respective terms can be found in the Incoterms 2020.

What are the requirements for niche markets?

Fair trade

The concept of fair trade supports fair pricing and improved social conditions for producers and their communities. Especially for labour-intensive products like handmade paper notebooks, fair trade certification can give you a competitive advantage.

Common fair trade certifications are issued by:

• World Fair Trade Organisation (WFTO)
• Fairtrade International
• Fair For Life

FSC certification

There is a niche market for certified sustainable handmade notebooks. FSC (Forest Stewardship Council) certification is the most common label for sustainable wooden products. This includes paper. The FSC label guarantees that a product’s source material comes from responsibly managed forests. These products are especially popular in Western European markets.

For more information, see the three steps towards FSC certification.

2. Through what channels can you get notebooks on the European market?

How is the end-market segmented?

The notebook market is segmented into low-, mid- and high-end segments.

Figure 1: Notebook segmentation in Europe

Low-end market

In this segment, price and functionality are leading factors and, as such, the notebooks are simple and inexpensive. Value addition is hard, and therefore this segment offers limited possibilities to differentiate from suppliers that excel in terms of cost. The notebooks in this segment are often available in hypermarkets and supermarkets, discount stores that have grown significantly over the last decade such as Action, lower-end department stores and online.

Mid-end market

The mid-end markets offer the most opportunities. The middle segment puts more emphasis on design, material and finish. This segment follows trends and the prices are often reasonable. These notebooks are often sold in mid-end department stores such as HEMA, mid-end stationery speciality shops such as Paperchase and Typo, book shops and online.

High-end market

Trends, materials, finishing and design play a key role in the high-end market. Notebooks in this segment are often purchased as a gift item from high-end department stores such as Selfridges and online.

Through what channels do notebooks end up on the end-market?

The channels through which notebooks are put on the market follow the traditional patterns: import takes place via importers/wholesalers that supply to retailers. Larger retail chains often bypass the importers/wholesalers and import themselves. Online platforms have become increasingly prominent. In some cases, buying agents play a role. Below is an overview of the main actors in the market for notebooks.

Buying agents

Buying agents do not import, but instead represent European buyers in the sourcing country. Sometimes agents have a more limited role, such as checking the quality of the shipments in your warehouse on behalf of a specific importer or checking the codes of conduct that exporters have agreed with the buyer. Agents can work individually or as part of purchasing companies. They mostly operate based on commission.

Importers/wholesalers

Importers/wholesalers sell products to retailers in their own country or region, or re-export to the broader European continent. Some European markets are therefore supplied by wholesalers/importers from other European countries (internal European trade). These importers/wholesalers take care of the import procedures. They take ownership of the goods when they buy from an exporter (as opposed to agents), taking on the risk of the onward sale of the products.

Developing a long-term relationship with these importers/wholesalers can lead to a high level of cooperation on appropriate designs for the market, new trends, use of materials, type of finishing and quality requirements.

Retailers

At retail level, notebooks can be found in a wide variety of specialist stationery and gift stores. Key locations include bookstores and larger stores like WH Smith that sell a wider variety of items beyond books, stationery stores (like Paper Tiger), gift stores (like Suck UK) and department stores. All of the stores mentioned here vary in terms of the segments they target: lower, middle or high.

Handmade paper notebooks may be sold in stores that engage in causal marketing, for instance focusing on fair trade or environmental causes. Examples include Maison du Monde and Lamali (both in France), Oxfam, WWF (in the United Kingdom), Contigo and El Puente (both in Germany).

Some retailers, especially the larger chains, are increasingly importing directly from their suppliers in developing countries. Others, mainly the smaller independent stores, order in Europe from wholesalers. Retailers come in many sizes: large and part of a chain, or small and independent. There is a tendency for consolidation in European retail, with large retail brands becoming more widespread in Europe and more ‘lifestyle-centred’ (offering home and office supplies as well as home decor, textiles and fashion accessories).

Web shops

The internet has become a very important channel for sales of consumer goods and gifts in particular. Most of the relevant retailers have their own e-commerce channel. Brands, wholesalers and retailers additionally make use of mega online platforms like Amazon to sell their goods to consumers. Some of the relevant e-commerce platforms for notebooks include gift platforms like Prezzybox, Notonthehighstreet and Findmeagift in the United Kingdom, Dekadowinkel in the Netherlands and Ideecadeau in France.

Figure 2: Trade channels for notebooks in Europe

 

What is the most interesting channel for you

Depending the size of your operations and production volume, importing wholesalers or importing retailers are likely to be the most interesting channel for you. Importing wholesalers come in many sizes, from small and specialised businesses to large companies dealing with a broad category of products. When it comes to handmade notebooks, retailers typically are not specialised in stationery, but instead offer a cross-category lifestyle collection to their retail network. Importing retailers are usually just looking for stationery lines for their outlets, but they will also carry broad product ranges for the home. Importing retailers tend to look for suppliers that can offer considerable volume.

Smaller independent retailers do not import themselves, but will instead source from the wholesaler. If they want ‘something different’, they might try to connect with exporters from developing countries at fairs or through the internet. These exporters will then need to distribute the products straight to the retailer’s doorstep. Such systems may work, but since volumes are generally small, the cost of transport takes up a relatively large portion of the value of the consignment. Also, restocking is not easy, as this is time-consuming and not always what the retailer wants: their loyalty is therefore not guaranteed.

Supplying stationery to offices is a B2B business in its own right, and since a company’s clientele can be quite a large group, purchase order volumes can be very large. Order sizes can merit direct purchasing from developing country suppliers. Examples of such office stationery suppliers include Office Supplies, EuroOffice and Otto Office.

3. What competition do you face on the European notebook market?

Germany is a key player in Europe’s paper stationery industry and is therefore the main supplier from within Europe. However, China is by far Europe’s leading supplier, essentially based on outsourced manufacturing of notebooks. Its position has rapidly expanded from €120 million to €180 million in a matter of five years. Poland is also responding to the strong demand. Price per ton acquired would suggest that Italy and the United States supply the most luxurious brands to the European market. China, Poland and India (the 7^th largest supplier) are key competitors from a developing country perspective.

Which countries are you competing with?

China is the main manufacturer

China has become the factory of the world, no less so in paper stationery. It is primarily and strongly focused on contract manufacturing, largely for lower-end segments, but increasingly also for more luxurious gift product brands. A new raw material that will appeal to those interested in sustainability in the European market is bamboo paper. Notebook production is concentrated in two main areas in China: Guangzhou and Ningbo in Zhejiang Province.

Poland is the fastest-growing competitor

Poland is rapidly entering the territory of supplying Europe’s growing demand for notebooks. Contract manufacturing is currently the main focus. Handmade paper notebooks are not part of Poland’s export portfolio.

The country’s strength is its geographical proximity to the European market, giving suppliers the opportunity to offer short delivery times. Polish suppliers also have a good understanding of the European consumer and have well-established, efficient production lines. To compete with its relatively cheap production, you should focus on design, branding and material use. Moreover, ensure you offer a high level of service to build a strong relationship.        

India has a fast-growing home market                       

India’s stationery sector is becoming more active at home, with increasing literacy rates along with rapid growth in GDP. At the same time, domestic quality expectations are expanding and bringing India closer to the level sought in European markets. In the lower- and mid-end segments, large-scale establishments are also including contract manufacturing for export in their business (which has more of a domestic orientation). When it comes to more of a gift orientation in the higher-end segments with luxury leather-bound notebooks and handmade paper notebook producers, however, exporting is a higher priority.

Handmade paper products: competing country comparison

With respect to handmade notebooks, the various source countries are quite diverse in terms of material, capacity and positioning.

Table 1: Competing countries in handmade paper products

	Main paper materials	Volume & market
Nepal	Lokta paper	Domestic market and exports
China	Xuan paper for calligraphy Bamboo paper	Largest exporter of handmade paper products High volume, Western-designed, contract manufactured
India	A vast variety of products including hemp paper and khadi cotton papers	Second-largest exporter of handmade paper products, high volume
Thailand	Mulberry handmade paper	High volume for tourism market
Vietnam	Rice straw, banana fibre, bamboo paper	High volume for tourism market
Indonesia	Banana leaf, mulberry handmade paper	High volume
Japan	Washi, traditional Japanese handmade paper	Low volume for domestic market

Source: ITC Nepal Sector Strategy for Handmade Paper

Which companies are you competing with?

Examples of Chinese paper notebook producers/exporters include:

• Guangzhou Dezheng Printing Co., Ltd. manufactures a wide range of paper products such as notebooks. The company produces its own designs and offers customised items.        
• New Bamboo Paper. This company is tapping into the trend of sustainability by producing most of its products using recycled waste paper.

Examples of Polish paper notebook producers/exporters include:

• Promonotes focuses on contract manufacturing, but also produces under its own brand. The company is FSC certified, the most common label for sustainable wooden and paper products.                  
• Biurfol is a producer of office supplies, including notebooks. The company uses recycled PVC, which is reprocessed into raw material.

Examples Indian paper notebook producers/exporters include:

• Viva Global, which focuses on luxury and quality notebooks. The company produces its own designs and offers customised items.                                                                                     
• A.L. Paperhouse. This company produces handmade stationary products, including notebooks, made from recycled cotton.

Which products are you competing with?

Although pen and paper will most likely never disappear, competition from digital products is increasing. Nowadays, consumers (at school, home and in offices) are increasingly taking notes on their devices, such as their phone or tablet. Competition is therefore mostly to be found in the digital area.

Applications on smartphones and tablets

Most smartphones and tablets have a standard application installed for note-taking, and several notebook applications available for all types of phones and tablets. An example of a widely used application for taking notes is Evernote. Note-taking applications are often used with a Stylus. This is a pen-like object included with some tablets.

Smart/digital notebook

A smart or digital notebook allows you to write with a pen and paper, while still offering the ability to turn those notes into digital files that you can edit and manipulate digitally later on. Depending on the type and brand, special or normal paper is used. An example of a smart notebook is the Smart Writing Set Ellipse from Moleskine.

4. What are the prices for notebooks on the European market?

Table 2 gives an overview of the prices of notebooks in the low-, mid- and high-end market segments.

Table 2: Indicative consumer prices of notebooks in Europe

Low-end	Mid-end	High-end
Up to €10	€10 – 15	€20 and over

Consumer prices depend on the value perception of your product in a particular segment. Your marketing mix influences this:

• product benefits
• promotion (brand or not, communication of product benefits)
• points of sale (reseller positioning)
• price

Your products will be sold to European consumers for a price that is significantly higher than your selling price. The consumer price is approximately 4-7 times the FOB price in the country of origin. Incidental hikes in the price of raw materials are not directly passed on to the consumer, but exert pressure on exporters, importers and retailers’ margins.

The following percentages give an indication of a price breakdown for notebooks in the supply chain:

• Shipping, import, handling: +25%
• Wholesale: +100%
• Retailer: +100-150%
• Retail price (VAT)*: +20%

*VAT percentages in Europe range from 18% in Malta to 27% in Sweden. On average, these percentages are around 20%.

This study has been carried out on behalf of CBI by Globally Cool B.V. in collaboration with GO! GoodOpportunity.

Please review our market information disclaimer.