The European market potential for notebooks

Whilst the outsourcing of notebook manufacturing has increased over the years, the trend has not gone as far as in other sectors like apparel. Countries like Germany, France and the United Kingdom are still important producers and, in fact, their production expanded during the 2014 to 2018 period. The depreciation of the British currency and trade uncertainties due to the Brexit, may cause buyers from the United Kingdom to start to seek a more local supply. Despite increasing European production creating competition for suppliers from developing countries, the demand for notebooks is strong, with imports growing significantly and consistently in recent years.

1. Product description

In the home sector, notebooks are part of the category “office and school” and “leisure”. In this study the following codes are used in reference to the trade of notebooks:
Table 1: Product codes

Harmonised System (HS)	Prodcom	Description
4820.1030	1723.1315	Notebooks, letter pads and memorandum pads without calendars, made of paper or paperboard

Apart from the purely functional notebooks used in offices and schools, the notebooks discussed here are mainly used for leisure. Consumers write down their thoughts, scrapbook and doodle or draw in them, usually as a hobby or pastime. They make great gifts, for men, women and children.

Notebook covers can be made from various raw materials including:

• textiles, such as cotton
• leather
• paper
• paperboard

The pages are  usually made of handmade or industrially-produced paper, textile fibres (e.g. cotton), or alternative fibres such as bark, banana fibre, mulberry, lokta and argeli, or even elephant excrement. Because consumers prefer a white or off-white colour, paper is often bleached. It is  standard for notebooks to 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.

Notebooks come in an endless variety of sizes, designs and colours, depending on:

• the use of the notebook
• whether or not it is a gift
• the preferred style

You can add character with:

• colour and decoration
• material
• accessorising
• small extras such as pens or pencils
• sustainability aspects

2. What makes Europe an interesting market for notebooks?

The European market is growing fast

The European market for notebooks is worth €500 million. The annual growth averaged more than 10% between 2014 and 2018. This is considered a high growth rate.

The urge felt by European consumers to escape from the electronic overload in their lives, is driving the rapidly increasing popularity of notebooks. According to the Financial Times, the awareness of stationery and appeal of luxury paper is unprecedented and could approach the levels seen in  Japan and Korea in terms of an obsession with luxury paper. This is paving the way for more growth to come.

European paper notebook consumers are showing an appreciation for something unique, opening doors for smaller producers in developing countries to add value to the product with a story behind it. However, it should be noted that there is less emphasis on handmade items in the market and more on quality and design, particularly of the notebook cover (e.g. leather bound), but also of functional attributes.

Production is mostly outsourced to lower cost countries

Outsourcing production to lower cost countries within and outside of Europe, particularly China, remains the main pattern. This means there is a significant supply of manufactured products from developing countries, but the European suppliers take care of the marketing. Additional value addition may take place in Europe, for example, in cases where the pages of the notepad are imported but are added in Europe to the specially designed cover made of various materials.

Overall, supply from within the European Union still dominates. As illustrated in Figure 1, imports from both European and developing countries are growing, though it should be added that the gap between the two sources is expanding. The share of intra-European imports is increasing. The import value from developing countries still increased significantly from €143 million in 2014 to €204 million in 2018. Imports from the rest of the world – primarily Japan and the United States – are also increasing slightly in response to increasing European demand.

3. Which European countries offer most opportunities for notebooks?

The two European countries that offer the most opportunities for notebook producers from developing countries are the leading importing countries the United Kingdom and Germany, followed at some distance by the Netherlands, France, Spain and Italy.

Production of notebooks

The leading importers are also among the largest producers in Europe. Germany and France are by far the biggest producers, followed at some distance by the United Kingdom and Spain. The United Kingdom imports more than twice the value it produces. German imports are at about the same level as the country’s production. France, the Netherlands, Spain and Italy produce more than they import. Austria and Poland are also among the leading notebook producing countries.

Table 2: Production of notebooks by leading European producers (€ million)

	2014	2015	2016	2017	2018
Germany	92.4	113.4	95.4	99.2	100.8
France	84.2*	84.2*	86.7*	83.4*	93.5
United Kingdom	36.9	45.4	47.3	47.6	43.8
Spain	27.1	29.2	27.3	32.6	31.0
Austria	16.9	18.0	18.0	17.5	19.0
Poland	6.6	8.0	7.7	8.1	9.7
Italy	8.0	6.6	5.1	5.3	8.3
The Netherlands	5.6	6.2	6.2	5.6	6.7

*value of quantity data estimated based on 2018 price

Source: Eurostat, PRODCOM

Growth of real private consumption expenditure

Private consumption expenditure includes all purchases made by consumers, such as food, housing (rents), energy, clothing, home accessories, health, leisure, education, communication and transport, as well as hotel and restaurant services. It is an important indicator for the European home accessories market. The sector is closely linked to economic conditions. When economic circumstances and prospects are dim, consumers postpone buying non-essential (luxury) items. Conversely, when economic conditions are favourable, private consumption expenditure and purchases of non-essential (luxury) home accessories surge. Looking at the six markets illustrated in Figure 3, the six largest European import markets described above, we see that private consumption expenditure growth is forecast to be most pronounced in Germany and France (though modest between 1% and 1.5%) whilst Spain, the Netherlands and the United Kingdom will face a slowdown. The outlook for Italy remains bleak in terms of consumption expenditure.

Brexit could negatively impact demand in Europe’s biggest market

The United Kingdom is the largest European import market for notebooks. It surpassed the value of €100 million and is seeing robust growth: more than €22 million since 2014. A significant proportion (66%) of imports originate from developing countries. At the same time, the United Kingdom is a relevant producer and exporter of notebooks, as shown in Table 2. On the whole, it is a large and attractive market from a developing country perspective.

As the British pound sterling weakens due to the Brexit process, the situation may change as buyers sourcing from abroad see costs rising and may resort to sourcing more locally. On the other hand, purchasers from the United Kingdom could also switch from buying from European importers to buying more directly from developing countries. If the latter occurs, there will be greater opportunity for developing country suppliers. The United Kingdom is home to several well-known brands including Smythson, Stamford and Faber&Faber.

Although modest economic growth is projected for 2019 and 2020, the withdrawal of the United Kingdom from the European Union (Brexit) will have a major impact on the United Kingdom’s consumer confidence throughout 2019 and in the years to follow. This is also reflected in the downward trend of consumer expenditure as shown in Figure 3. It is likely that the uncertainties related to Brexit and the resulting economic slowdown will impact the consumption of notebooks.

Germany is the leading producer and supplier of notebooks in Europe

The German import market has expanded rapidly over the last five years, seeing an increase of 43% since 2014 to a value of €97 million in 2018. At the same time, Germany is a leading producer and supplier to the world as well as to the rest of the European Union. That means that German production does compete with developing country suppliers.

China and Poland are key sources of German imports. A significant proportion of these imports German designs are produced through contract or outsourced manufacturing. Only 25% of German imports originate from developing countries. It is likely that a significant proportion are German brands like Semikolon, Gmund and Milligram., of which production is outsourced to other countries. Between 2014 and 2018, Poland has responded the strongest to increased German demand and has taken over a share of production from of developing countries.

Between 2019 and 2020, private consumption expenditure in Germany is expected to increase, meaning that consumption of (luxury) products such as notebooks is likely to rise. 

The Netherlands is a fast-growing importer of notebooks

Since 2014, the Netherlands has seen imports grow at an impressive rate of 83%, with an import value up from €29 million in 2014 to €53 million in 2018. It should be noted that almost half of the imports are re-exported. As such, the country is more of a redistributing gateway to Europe. Not surprisingly, a high proportion (61%) of Dutch imports originate from developing countries. The notebooks are sourced primarily from China and India. As illustrated in Table 2, the Netherlands is not a significant producer of notebooks.

However, the economy and private consumption expenditure growth are slowing down. Growth in private consumption expenditure is projected to drop from 2.5% in 2018 to 1.1% in 2020. The Brexit, as well as the international trade disputes between the United States and China have a big impact on the Netherlands. The country relies heavily on international trade and negative developments in that respect have an amplified effect on the country’s economic performance. This may have an effect on the country’s consumption of notebooks.

The impact on the imports of notebooks might extend beyond the country itself, since the Netherlands is a big re-exporter of goods. As such, developments in other European countries will also play a role. Given the economic slowdown in Europe as a whole, a sharp increase in imports is not expected. On the other hand, a decrease is not likely, either, since the economies will still grow, albeit at a slower pace.

France more than doubled its imports over a five-year period

France is a leading and high value producer of notebooks, only second to Germany. Some well-known brands include La Petite Papeterie Française and Calepino. As an import market, it is significantly smaller than the United Kingdom and Germany, although imports more than doubled between 2014 and 2018, reaching a value of €49 million in 2018. The French market imports a relatively small and stable share from developing countries, amounting to 20% in 2018.

The economic growth in France has slowed down after a gradual recovery. Global uncertainties and the effects of social unrest weighed on consumer confidence and consumption of luxury products in 2018. However, 2019 saw a strong increase in private consumption expenditure growth compared to 2018. In 2020, the growth is expected to stabilise and increase slightly. The impact on consumers spending on luxury products such as notebooks will likely be moderate. 

Spain imports half of its notebooks from developing countries

Spain is one of the smaller countries among the top six import markets, importing notebooks worth €22 million in 2018. At the same time, as shown in Table 2, Spain is the fourth-largest producer of notebooks. Some 50% of its imports originate from developing countries, mainly China. A significant proportion of this amount consists of outsourced production. Miquelrius is a Spanish brand well known through the world.  With regard to the country’s private expenditure, the growth is forecast to stabilise at a reasonable level in 2020, the highest of the top six import markets.

Italy is a small but steady market

The Italian notebook import market is relatively small with values fluctuating around €20 million per year. It is also manufactures a relatively small quantity of notebooks. Having said that, there are some well-known Italian brands such as Moleskine, Tassotti, CIAK. Like Spain, more than half (53%) of Italian paper notebook imports originate from developing countries, in particular China and Vietnam.

The Italian economy has been broadly stagnant for the last five quarters and projections for the near future are not very cheerful. The European Commission’s forecast indicates that Italy will record economic growth of just 0.1% this year and 0.7% in 2020, which would make it the slowest-growing European Union economy in both years. In line with the economic performance, Italian private expenditure growth is forecast to increase slightly in 2020 compared to 2019. Since the difference is minimal, it is not expected to have a significant impact on the demand for notebooks.

4. What trends offer opportunities on the European market for notebooks?

Notebooks play a key role in two major consumer trends that dominate today’s European society: the desire to live more offline and to live more sustainably. They also tap into the trends of being more personal and giving meaningful presents. For more information, see our study about trends for Home Decoration & Home Textiles. We will outline each trend below.   

Wellness: living offline

European consumers want to embrace the here and now. They make the most of every moment and experience, record it and move on. Average attention spans have fallen to eight seconds. Internet offers the perfect platform to follow, connect, record and review, share and to create an individual identity. The notebook and everything it represents provides a small but firm countertrend to all of this. It celebrates offline existence, introspection, “slow” communication and a moment of “me-time”.

Interestingly, the youngest generation amongst the Millennials (a generation generally noted for its online life) tends to be offline more. They are showing a renewed interested in paper-based communication and reflection.

“Me time”

In their notebooks, consumers put their thoughts on paper, draw and illustrate or scrapbook. These activities create moments of reflection and introspection, real quality time, or “me time”. Stressed-out European consumers also occasionally want to be offline, alone or with their nearest and dearest. The notebook can be a meaningful tool in this process.

Triggering the senses

The look and feel of the materials and techniques used enhances these “Me time” moments. This can include:

• the texture of natural fibres
• accessories, such as beads
• embossed surfaces
• fabrics
• colour effects, such as gradient or marbled effects

Image 1: Example of a notebook with marble effect